Local officials announced on Friday that China's State Council granted Nyingchi Autonomous Region's request to be the fourth prefecture-level city in the Tibet region.
As a newly established city, Nyingchi will form a people's congress standing committee as well as government and political advisory body as a part of the status upgrade.
A State Council official said that no new government building will be constructed and no additional employees will be hired after the new city's inauguration.
Nyingchi, situated in the southeatern part of Tibet, covers an average altitude of 3,100 meters and caters to 2.8 million tourists in 2014, with tourism revenues of 2.8 billion yuan ($455 million), making it a top tourist destination in the region.
The Yarlung Zangbo River, passing through Nyingchi, is one of the most visited places in the newly established city because it has the lowest altitude in the region with warm and temperate temperatures.
Regional capital Lhasa, Qamdo and Xigaze were already proclaimed as cities in Tibet before Nyingchi became the region's fourth prefecture-level city.