The Italian, who is currently the coach of Chinese Super League (CSL) side Guangzhou Evergrande, will take charge of the squad for the four-nation competition, which kicks off on March 21 with China facing Thailand in the semi-finals.
Uruguay and Uzbekistan are also participating in the event, which will be held in Nanning, with the final to be played on March 25.
Cannavaro will be advised by Marcello Lippi, who stood down from the head coach's role following China's exit from January's Asian Cup at the quarter-final stage.
The Chinese Football Association did not say whether Cannavaro's appointment was permanent or only for the duration of the China Cup.
A 23-man squad has been selected for the tournament but striker Wu Lei, who finished last season as the top scorer in the CSL before joining Espanyol in late January, has been left out.
(Reporting by Michael Church, Editing by Christian Radnedge)
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