Under the non-binding memorandum of understanding announced late Tuesday, Azure Hydrogen Corp. has committed a $1 million up-front payment to Ballard.
Azure wants to develop fuel cell bus capabilities in China with Ballard's technical support and funding from Chinese sources.
In March, Azure signed a deal to acquire a 10 per cent stake in Dantherm Power, Ballard's telecom backup power subsidiary, for $2 million.
Azure also placed an order earlier this year for a 175-kilowatt ClearGenTM distributed power generation system from Ballard.
Ballard shares closed up 19 cents at $2.08 on the Toronto Stock Exchange on Wednesday after trading as high as $2.47.