The former Arsenal and Real Madrid star will be the biggest name to appear in China's Super League, which is growing in stature despite significant corruption problems that have left several officials facing jail.
"We have basically agreed on the details of the contract, but there are small details that we still need to confirm tonight," club spokesman Ma Yue told AFP.
He added that the 32-year-old Frenchman would start playing for the team in January if all the fine details were ironed out, but was unable to reveal any details of the deal, adding a formal announcement would be made on Monday.
Chinese media quoted a report by sports network ESPN saying Anelka had agreed a two-year deal with Shenhua for a weekly salary of £200,000 ($313,000), reportedly a marked rise from his £90,000 per week at Chelsea.
Previous media reports had speculated he was negotiating a three-year deal with Shenhua.
Sina's weibo, China's most popular Twitter-like service, was awash with comments about Anelka's imminent arrival.
While they welcomed the move, many netizens focused on the ESPN report about his weekly salary, in a country where the average disposable monthly income for urban dwellers is just 1,592 yuan ($251).
"That's eight million yuan a month… Are you kidding me?" one user wrote.
"What you earn in a week is equivalent to what ordinary people earn in a lifetime," another said.
Chinese football teams are increasingly resorting to buying foreign players in a bid to boost the sport, which people in the Asian nation adore.
In July, Argentine midfielder Dario Conca became China's most expensive signing—and reportedly, one of the world's best paid players—when he inked a $10 million deal with Guangzhou Evergrande.
The Chinese champions, who are bankrolled by a leading property company and were relegated two seasons ago for match-fixing, have also splashed out $7.5 million on Brazilian forwards Cleo and Muriqui, last season's top scorer.
China's foreign legion also includes Henan Construction's Leandro Netto de Macedo and Shanghai's Luis Salmeron, while Romanian Christian Danalache and Serb Aleksander Jevtic both play for Jiangsu Sainty.
But despite China's vast size and love of football, the national side has only reached one World Cup—in 2002, when they lost all their games without scoring a single goal.
The domestic game, meanwhile, has been plagued by scandals and violence.
When the Super League kicked off in July, there was no title sponsor and state broadcaster CCTV refused to show games on national television.
Shanghai Shenua, 11th in the Chinese league last season, is the latest stop on Anelka's nomadic career, with spells also at Paris Saint-Germain, Liverpool, Manchester City, Bolton Wanderers and Turkey's Fenerbahce.
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