The plan comes even as China has stepped up scrutiny into business dealings involving US tech firms including Facebook, Apple and Qualcomm amid intensifying trade tensions between Beijing and Washington.
Google, which quit China’s search engine market in 2010, has been actively seeking ways to re-enter China, where many of its products are blocked by regulators.
The Intercept earlier reported Google’s China plans on Wednesday, citing internal Google documents and people familiar with the plans.
The project is codenamed “Dragonfly” and has been under way since the spring of 2017, the news website said.
Progress on the project picked up after a December meeting between Google’s chief executive, Sundar Pichai, and a top Chinese government official, it added.
Search terms about human rights, democracy, religion and peaceful protests will be among the words blacklisted in the search engine app, which The Intercept said had already been demonstrated to the Chinese government.
The finalised version could be launched in the next six to nine months, pending approval from Chinese officials, it added.
Chinese state-owned Securities Times, however, said reports of the return of Google’s search engine to China were not true, citing information from “relevant departments”.
But a Google employee familiar with the censored version of the search engine confirmed to Reuters that the project was alive and genuine.
The worker, who declined to be named, said that he had seen slides on the effort and that many executives at the vice-president level were aware of it.
Reports of a possible re-entry spurred a strong reaction on Chinese social media outlets on Wednesday evening, including debates over the merits of a censored search engine versus accessing the US version through illegal virtual private networks.