SHANGHAI/BEIJING (Reuters) - China's finance ministry said on Monday it would start the long-awaited sales of long-term special treasury bonds that Beijing hopes will help stimulate key sectors of a flagging economy this week.

The finance ministry confirmed what four sources had told Reuters earlier on Monday that the 1 trillion yuan ($138.23 billion) of special government bonds would have tenors of 20 to 50 years and issuance will begin on May 17.

The sources who have direct knowledge of the plans said 300 billion yuan worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion yuan worth of 50-year bonds would be issued.

China's Premier Li Qiang on Monday urged officials to make good use of the ultra-long special treasury bonds to support the implementation of major national strategies as well as building security capabilities in key areas, state media reported.

China would make coordinated arrangements for key tasks for this year and the next few years, coordinate and make good use of conventional and extraordinary policies, state media said. The country would also better coordinate government investment and social capital, the report said, citing Li, who chaired the virtual meeting.

Market participants have been waiting for weeks for details of the issuance pipeline of these special treasury bonds, which were first announced during China's parliamentary conference in March.

Given the issuance was foreseen, news of the details caused bond yields to slip slightly. The yield on 30-year bonds fell 2 basis points to 2.55%. It is down 30 bps this year.

Zou Wang, an investment director at Shanghai Anfang Private Fund Management, said that while such a supply of bonds is negative for prices, it had been priced in.

"In addition, the market now expects the central bank to provide liquidity support through cuts in interest rates and reserve requirements," he said.

The finance ministry said 30-year special bonds will be sold in 12 tranches, from May 17 to Nov. 15. It said 20-year bonds will be sold in seven batches beginning May 24, while 50-year bonds will be issued in three tranches from May 17.

Details of the timeline come just after data showed new bank lending in China fell more than market participants expected in April from the previous month while broad credit growth hit a record low.

The expansion of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 8.3% in April, a record low, from 8.7% in March.

China's economy grew at a faster-than-expected 5.3% pace in the first quarter, offering some relief to officials as they try to work through a property downturn and curtail local government debt. However, indicators show that demand at home remains frail, weighing on overall momentum.

Cash raised through the special bonds will support the rebuilding of disaster-hit areas in the country and improve urban drainage prevention infrastructure to boost China's ability to withstand natural disasters, state media have said.

The Financial Times reported earlier in the day that Chinese authorities had kicked off plans to sell the long-dated bonds and the People's Bank of China (PBOC) had asked brokers for advice on pricing. ($1 = 7.2341 Chinese yuan)

(Reporting by China newsroom; Editing by Vidya Ranganathan, Christopher Cushing and Alex Richardson)