The company shut down the engine in 2010, complaining that free speech was being limited.
But online news site The Intercept says Google has being working on a project code-named Dragonfly that will block terms like human rights and religion, a move sure to anger activists.
One state-owned newspaper in China, Securities Daily, dismissed the report.
When questioned about the claim, a spokeswoman for Google provided a brief statement.
"We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com," it said.
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The search app would "blacklist sensitive queries", The Intercept says, identifying and filtering websites currently blocked by China's so-called Great Firewall.
According to documents it had seen, a search via the app would result in a list with banned websites removed and a disclaimer saying that "some results may have been removed due to statutory requirements".
Google has not officially commented on The Intercept report.
Spokesman Taj Meadows told AFP: "We don't comment on speculation about future plans."
One worker who spoke to Reuters said he had transferred himself out of his unit to avoid being involved in the project.
Another source who spoke to AFP said: "There's a lot of angst internally. Some people are very mad we're doing it."
But some believe such a move should not be a surprise.
Chief executive Sundar Pichai was quite clear about his ambitions when he told a conference in 2016: "Google is for everyone - we want to be in China serving Chinese users."
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