An animal welfare group is to save 130 bears from a bile extraction farm in China, its largest rescue so far, in a bid to end a business that has sparked outrage over animal cruelty amid growing opposition.

Hong Kong-based Animals Asia says as many as 10,000 bears are held in captivity in China and used for bile extraction, often under poor conditions that can cause long-term physical and psychological suffering.

The bile, taken repeatedly from incisions in the bears' gall bladders, is used in some traditional Chinese medicines that claim to cure eye and liver ailments.

Animals Asia has reached a deal with state-owned Flower World to take over its bear bile farm in Nanning, capital of south China's Guangxi Zhuang Autonomous Region, and convert it into a sanctuary for the Asiatic black bears, known as moon bears for the white crescent marking on their chests.

The deal was agreed after company executives said they were losing money on the venture and acknowledged it was "time for change."

"Particularly in the last two years, there has been a lot of public discussion about the practice of extracting bear bile from live bears. Most people oppose it, so we consider prospects for the bear bile business will be less and less optimistic," said Yan Shaohong, Flower World's general manager.

The company had invested around 8 million yuan (US$1.3 million) in the farm but had yet to sell bile, and extraction had stopped two years ago.

Animals Asia said they had put aside US$5 million for the next three years to construct and run the sanctuary and retrain staff to care for the bears. Many had been used for their bile, while the others had been retained for breeding.

While sales of bear bile are legal in some Asian nations, any trade across borders is prohibited by the Convention on International Trade in Endangered Species.

In 2011, anger erupted online to news a Chinese company that extracts bear bile hoped to list on the stock market.

The firm eventually withdrew its public listing application.

Jill Robinson, Animals Asia founder and CEO, said many of the rescued bears, which can live as long as 30 years, will likely remain at the sanctuary for the rest of their lives.

"This negotiation is a result of years of growing awareness and increased opposition, with the bear farmer showing the moral integrity to do the right thing," Robinson said.