ZTE is the latest in a line of hardware manufacturers that have struck a patent deal with Microsoft, which has successfully argued that Android - which Google provides free to handset makers uses Microsoft-owned technology.
Google itself, and its Motorola phone maker unit, are the most notable holdouts against a patent agreement with Microsoft. Those differences could be settled soon, depending on the judge's verdict in a patent trial in Seattle.
Reaching agreement with ZTE means Microsoft now has patent deals in place with four of the five leading Android phone makers.
It already has agreements with South Korea's Samsung Electronics Co Ltd and LG Corp, and with Taiwan's HTC Corp.
It has no deal with China's fast-growing Huawei Technologies Co Ltd.
The ZTE deal marks progress for Microsoft with companies operating in China, following last week's patent agreement with contract manufacturer Hon Hai Precision Industry Co Ltd, parent of Foxconn.
Microsoft said it now has Android patent deals with about 20 device makers, and 60 percent of Android phones sold worldwide are covered by a Microsoft patent license.
© Thomson Reuters 2013