China has signaled its intention to move away from its dependence on western software products, with the announcement that it will work alongside Canonical to develop a new, open-source operating system customized especially for Chinese users.

The end result will be an entirely new version of Ubuntu, Canonical’s Linux-based OS that could well end up being the standard operating system for PCs, servers and mobile devices in China’s IT sector.

UK-based Canonical said in a statement that it’s setting up a joint lab alongside the China Software and Integrated Chip Promotions Center (CSIP) and the National University of Defense Technology in Beijing to work on the project.

The move is the clearest signal yet that China is determined to switch its IT systems to a locally developed OS and wean itself from its dependence on US firm Microsoft’s software. CISP is an institution under the Chinese Ministry of Industry and Technology, and has been actively promoting the use of open-source software for years, but with little success. While some government agencies in China use Linux-based operating systems and WMS (known as Kingsoft in the US) has become the standard office suite in government departments for government workers, it’s believed that Microsoft’s Windows software still commands a 95% market share in the country, according to analytics site CNZZ.com. In contrast, Linux-based systems account for just 1% of all Chinese users.

This might seem like bad news for the Redmond firm, but in all likelihood, Microsoft probably won’t be too fussed if the majority of Chinese eventually drop its Windows software, given that 77% of all computers are pre-installed with pirated software anyway, according to a 2011 report from the Business Software Alliance.

Canonical said that the new operating system, once developed, will be known as Ubuntu Kylin, and we can expect to see its first incarnation very soon. The first release has been penciled in for this April, timed to coincide with the global release of the standard Ubuntu OS version 13.04. Ubuntu Kylin will be tightly integrated with the online services run by Baidu and Alibaba Group. In addition, the OS will also incorporate payment processing for Chinese banks, as well as flight and train schedule information.

The name “Ubuntu Kylin” is actually an interesting choice, and suggests that the operating system will utilize technologies from the Kylin operating system, an open-source platform developed by the National University of Defense Technology. Canonical hasn’t indicated which elements of Kylin may be adopted, but it’s engineers certainly have some considerable expertise, having previously created the Tianhe-1A supercomputer, now the eighth-fastest computer in the world.