The Ministry of Labour and Social Security report said: "In the next five years, we expect the lands of three million farmers to be requisitioned annually."
China's rural population was 745 million at the end of last year, with 562 million people living in urban areas.
The country is going through an unprecedented urbanisation process with up to 300 million people expected to move into its cities over the next 20 years, government officials said earlier this year.
The number of officially-zoned cities is expected to increase to 1,000 by 2015 from just under 700 currently.
The government is trying to help the farmers by stepping up efforts to retrain them for urban living in expectation of massive unemployment, a labour ministry official said in the report, which was released on Friday.
The government also intends to strengthen regulations and inspections on the requisitioning of land by local authorities and business people, the official said.
Across China, farmland is often seized by corrupt local government officials and industrialists without adequate compensation and then converted to either industrial or residential use at great profit.
The government reported last month that the area of land seized illegally for development nationwide had jumped 20% in the first five months of this year.
Zhang Xinbao, a senior ministry official, said: "Illegal seizure of land has become more rampant in some places."