China fought on the North's side in the 1950-1953 war, managing POW camps as well as killing and capturing thousands of US troops before helping to drive them out of the North.
 
There have been questions about China having taken soldiers from POW camps to undeclared detention sites inside China.
 
Larry Greer, spokesman for the Pentagon's POW-MIA affairs, said officials were working out details such as the frequency and volume of the document searches as well as expenses before announcing a final decision on Friday.
 
But the deal - at least initially - will not give US researchers direct access to China's military records, Greer said.
 
Chinese archivists with security clearances approved by the People's Liberation Army will do the document searches before turning over relevant records to US analysts.
 
Still, the "joint archival effort is expected to open more avenues of research to enable US specialists to narrow their searches for the specific locations where American remains may be buried", Greer said.
 
China has consistently maintained that all POW questions were settled at the end of the war, but nearly every US administration since then has pressed Beijing to provide information on missing soldiers.
 
'Positive step'
 
Peter Rodman, who handled the issue with the Chinese when Donald Rumsfeld was defence secretary, told The Associated Press that the agreement was a positive step.
 
He said the move could answer lingering questions the families of missing soldiers have had for decades.
 
"It has special meaning to our military," said the senior fellow at the Brookings Institution.
 
Declassified US Army records from the 1950s show that the US knew of and were tracking hundreds of American POWs in China during the Korean War.
 
Between 1996 and 2005, the US conducted DNA and forensics analysis to identify the remains of many of the missing soldiers excavated from various sites in North Korea.
 
But in May 2005 the Pentagon suspended that co-operative effort, saying the North Koreans had created an unsafe environment for US search teams.