School leavers could get £45 a week in taxpayers' cash for using a gap year to do volunteer work in their community.
Ministers want more voluntary work before university
Chancellor Gordon Brown used a speech on Wednesday in London to say a pilot scheme started last year will be rolled out nationwide.
He says helping those who want a year out for community service but cannot afford it must be a national priority.
The government says 8% of 18-year-olds take gap years and they are mostly from private schools and southern England.
Treasury sources say the "national community service year" will be modelled on similar schemes like Americorps in the United States and projects in Australia.
Mr Brown will set out the costs and more details of what the sponsorship would involve, in his Budget on 17 March, but sources say it will be a "multi-million pound scheme".
He set out his plans in a speech to the National Council For Voluntary Organisations after meeting the heads of the US Americorps and Freedom Corps schemes last week.
A recent Mori opinion poll suggested 59% of 15-24-year-olds wanted to know more about how to get involved in their communities, he said.
The chancellor continued: "We have to make the volunteering opportunities on offer both interesting and exciting - and we need to make access to them easier...
"The advantages for young people are clear - to develop their personal skills, discover new communities, become more active citizens.
"The benefits to our country are clear too: to expand volunteering, to create a culture of service and to support worthwhile community activity.
"And as in America there could be help with basic living expenses and help for university, college or business start ups to follow."
Mr Brown announced nine pilot schemes in last year's Budget, with the first volunteers starting in areas like Tower Hamlets, Hackney and Newham and Leeds.
By the end of 2005, £5m is due to be spent on paying for 125 school leavers from underprivileged backgrounds to spend a year doing service in their communities.
Another 900 places will be added to those projects next year, with volunteers receiving a £45 weekly allowance and a £750 award for successfully completing their work.
Scotland First Minister Jack McConnell is due to announce a Scottish version of the scheme shortly - to be called Scotscorps.
The chancellor also used his speech to say more needed to be done to boost mentoring schemes as a source of help and advice.
"I wonder, for instance, whether - whilst taking consideration of child safety issues - we could not explore more innovative ways of recruiting people to be mentors and of course helping people in need of help," he said.
He suggested lessons could be learned from the success of websites like Friends Reunited and EBay in creating social networks.