CHINA says it will return the US Navy drone it seized in the South China Sea, but has accused the US of hyping up the incident.
Pentagon press secretary Peter Cook said direct engagement with Chinese authorities had secured an understanding for the return of the drone.
The announcement comes several days after Beijing ignored repeated requests to return the drone to a research vessel launched 80km north-west of the Philippines.
The Chinese defence ministry said one of its naval vessels had discovered a piece of "unidentified equipment” and checked it to prevent any navigational safety issues, before discovering it was a US drone.
"China decided to return it to the US side in an appropriate manner, and China and the US have all along been in communication about it,” the ministry said in a statement. "During this process, the US side's unilateral and open hyping up is inappropriate and is not beneficial to the smooth resolution of this issue. We express regret at this.”
The "hyping up” of the incident was an apparent reference to a tweet posted by President-elect Donald Trump about the incident, only a day after President Barack Obama had appealed for his restraint.
In the since-deleted tweet, Mr Trump wrote: "China steals United States Navy research drone in international waters - rips it out of water and takes it to China in unpresidented (sic) act.”
He later tweeted the message a second time, replacing unpresidented with unprecedented.
Without directly saying whether the drone was operating in waters China considers its own, the Chinese defence ministry said US ships and aircraft had for a long period been carrying out surveillance and surveys in "the presence” of Chinese waters.
"China is resolutely opposed to this, and demands the US stops this kind of activity,” it said.
"China will continue to maintain vigilance against the relevant US activities and will take necessary measures to deal with them.”
Beijing regards Taiwan as a breakaway province that is part of China, and the US has essentially accepted this situation for decades while selling arms to Taiwan.
Tensions between China and the US have escalated in recent years as the former has staked claims to ever- increasing chunks of territory and the latter has sought to maintain a strong military presence in the region.