Authorities say they are carrying out inquiries into other suspected cases.
The news comes just over a week after Communist Party leaders agreed a list of “cultural development guidelines”.
They include increased controls over social media and penalties for those spreading “harmful information”.
The Xinhua news agency quotes regulators as saying that efforts will be stepped up “to stop rumours and punish individuals and websites spreading rumours”.
It says a university student was detained after being accused of posting a fake news story about a man killing eight village chiefs in the south-western province of Yunnan.
It goes on to report that a website editor was issued with a warning after publishing a story about an air force fighter crash without confirming the facts.
And it says that a Shanghai resident was held in police custody for 15 days after accusations he had posted a falsified income tax document online.
The agency says China has 485 million registered web users.
“We have seen a tightening of control under the Hu Jintao government,” said Sarah McDowall, Asia-Pacific regional manager at IHS Global Insight.
“Officials are particularly worried by the rise in popular protests and will have observed the fall of Gaddafi last week. With China facing a leadership change next year, the government feels it cannot soften its stance.”
The State Internet Information Office is quoted as saying that officials were still trying to trace the authors of a further three news stories that “were not true”.
The SIIO was created in May to supervise online content, including the regulation of news websites.
The Chinese authorities have been concerned by a rise in the number of microbloggers – internet users who post short articles online to Twitter-like services.
The country’s most popular microblog operator, Sina Weibo, revealed that it had 250 million registered accounts sending about 90 million messages a day in August.
The popularity of the medium gives Chinese citizens the opportunity to spread their opinions in a way that was not possible before.
Earlier this month the SIIO’s director general was reported to have told microbloggers that they would be punished if they spread lies, rumours or pornography.
The warning came three months after the authorities blocked internet searches for retired President Jiang Zemin’s name after online posts claimed he had died. The 85-year-old later appeared in a live television broadcast.
Newswarped thought China had embraced the free market and competition yet they seem to be a bit upset that the propoganda department is getting a run for its money in the ‘false’stories stakes.
There has always been free speech in China. It just depends on what you say.