Lou Ye's "Mystery" tells the story of a mild-mannered woman who mounts a radical revenge after uncovering her husband's infidelity.
Aside from best picture award, Lou is also up for best director and Hao Lei, "Mystery'"s female protagonist, is a candidate for best actress.
Lou's films, which have long focused on sensitive subjects like sex, violence and politics, have repeatedly been censored by China's cultural authorities. He was prohibited from filmmaking for five years after submitting "Summer Palace" - about a generation's awakening and disillusionment - to the Cannes Film Festival without government approval in 2006.
"Mystery" is seen as marking Lou's entry into the commercial mainstream after years on the social and artistic edge, though his Chinese microblog says that censors asked him - and he agreed - to delete some violent scenes from the film.
In the best picture category, "Mystery" faces tough competition from Hong Kong director Johnnie To's "Life Without Principle," a movie about ordinary citizens caught in the fallout of the global financial meltdown. To is also up for best director, while veteran actor Lau Ching Wan, who portrays a triad thug seeking to recover money lost in a loan shark scheme is seen as a hot contender for best actor.
Taiwan-made "Gf-Bf" has seven nominations, including for film and director. Its best shot may be in the best actor category, where Joseph Chang portrays a gay man in a romantic triangle involving three former high-school classmates.
Also competing for the best film award are China's "Beijing Blues," about plainclothes crime-hunters, and "The Bullet Vanishes," a Hong Kong-China co-production about a detective investigating a series of murders in Shanghai of the 1930s.
The awards ceremony is Saturday evening.