Most of the drugs, produced by a pharmaceutical company in Shanghai, have already been recovered and authorities have tracked down the remainder, Xinhua news agency reported, quoting the Shanghai government.
Authorities suspended production and sale of the drugs, methotrexate and cytarabin hydrochloride, after receiving reports that several child leukaemia patients experienced difficulties in walking after being injected with them.
The drugs had also caused urine retention among some leukaemia patients.
The health ministry and the State Food and Drug Administration said the drugs were contaminated with an anti-cancer medicine which had been mistakenly blended in during production.
Factories manufacturing the drugs had been closed, Xinhua said.
The report did not mention whether any of the drugs have been exported.
China has announced a raft of new measures to tighten up on food and drug safety following recent scandals over dangerous Chinese-made goods reaching the market at home and abroad.
Mass food poisonings occur regularly in China due to lax food standards, while dangerous drugs arising from a corrupt and profit-driven medical industry have been known to kill people.
The former head of the State Food and Drug Administration, Zheng Xiaoyu, was executed last month following his conviction for taking bribes to approve hundreds of medicines, some of which proved dangerous.