The incumbent agency has worked with Li Ning since 2012. The account is worth an estimated US$50 million in billings.
Four 4A creative agencies including JWT Beijing, Publicis G4 Beijing and BBH Shanghai submitted pitch presentations in April.
Y&R will help the Chinese sportswear company develop a marketing communications strategy that will enable it to re-connect with young consumers.
Li Ning has lost traction due to a number of missteps that are well-documented in its latest interim results presentation, and as main competitors Nike and Adidas aggressively extended their reach into lower-tier cities.
The brand spent a lot of effort in the past two years refocusing on product categories like basketball and running which are sports of a participatory nature in China (read: more people to market to).
Li Ning is a brand possessing cultural heritage and national pride, that means "huge, latent potential for stronger brand health", said Y&R China CEO Charles Sampson.
"If we can be the ones to crack the Li Ning brand, this will make us famous. Everyone will be looking to see if we can pull it off," he said.