Businesses are set to receive £3,000 for every young person they hire, who is aged 18 to 24 and has been searching for a job for six months or more.
The funding, part of a "new deal" for young people set to be announced by Work and Pensions Secretary Pat McFadden on Monday, is aimed at creating 200,000 jobs.
Around 60,000 people are expected to be supported by the proposals.
The latest figures show that over 1 in 5 young people are not in work, training or education – a figure which has sharply risen in recent years.
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