Moet and VATS, a Chinese vintner, have agreed to work together on a plot of land that covers around 30 hectares (74 acres), a statement said.
"It is the first time that LVMH is launching the production of red wine in China," a spokesman told AFP. The investment will compliment a project announced in May 2011 to make white wine in northwestern China.
The latest plan should "allow us to offer a high-quality red wine to Chinese consumers in four to five years," the statement quoted Moet Hennessy president Christophe Navarre as saying.
LVMH already owns Wenjun, a well-known brand of Chinese spirits.