Decades of rapid urbanisation in China have seen the proportion of its urban population swell to more than 50 per cent, creating massive conurbations such as Beijing, Shanghai and Guangzhou.
Authorities will "strictly control the size of the population in especially large cities", Xi said at a meeting of a Communist Party policy group, the official Xinhua news agency reported.
Migration in China has for decades been limited by the country's "hukou," household registration system, which denies countryside residents equal access to health, education and housing benefits when they move to cities.
But Xi said urban registration restrictions would be "fully liberalised" in towns and small cities, while relaxing restrictions in middle-sized cities.
The report did not provide a timeline for the implementation of the new measures, or details on how small and large cities are defined.
Reforms to the hukou system have long been opposed by local governments and urban residents reluctant to shoulder the costs of extra benefits for migrants.
China -- the world's most populous country -- said the number of people living in cities exceeded the rural population for the first time in 2012. It aims for that number to reach more than 60 per cent by 2020.
The population of the capital Beijing reached more than 21 million at the end of last year, state media said, while the commercial hub Shanghai is reported to have more than 24 million residents.