Nick Clegg will set out £1bn government plans later to create 400,000 work and training placements in Britain to help tackle record youth unemployment.
The youth contract programme will see wage subsidies worth £2,275 offered to employers to take on 160,000 18- to 24-year-olds over the next three years.
The deputy prime minister will say the aim is to help young people "before long-term damage is done".
Labour said it had questions about how the programme would be funded.
The party has criticised the government for failing young people and scrapping its future jobs fund, which paid employers to take on the long-term unemployed.
The youth contract announcement comes a week after figures showed that youth unemployment had hit a record high in the three months to September, rising to 1.02 million.
The overall unemployment rate during that period was 8.3% - the highest since 1996.
The programme will begin next April and aim to get young people into a range of employment sectors, from the traditional, like retail and construction, to the emerging, like the green economy.
Some 160,000 young people aged 18 to 24 in England, Wales and Scotland will be taken on by employers using wage incentives worth £2,275 - half of the youth national minimum wage for six months.
Another 250,000 will have the opportunity to undertake work experience placements lasting up to eight weeks. These will be available to every unemployed 18- to 24-year-old who wants one and has been seeking work for three months or more.
There will also be a new £50m programme for the 25,000 most disadvantaged 16- and 17-year-olds in England - those known as NEETs (young people not in employment, education or training) - to get them onto an apprenticeship or into work.
The money will go to private sector employers and trainers on a payment-by-results basis, with payments for those young people sustainably engaged in further learning or an apprenticeship.
Other measures include at least 20,000 additional incentive payments for firms in England to create apprenticeships for 16- to 24-year-olds, and more support for young people at job centres, such as extra time with advisers and a careers interview.
The government says the £1bn being made available is new money, not a reallocation of existing funds.
It insists that certain expectations will be placed on those taking part - for example, anyone who drops out of a work experience placement or subsidised job will lose their benefits.
Mr Clegg will say: "The aim of the youth contract is to get every unemployed young person earning or learning again before long-term damage is done.
"But it's a contract, a two-way street: if you sign up for the job, there'll be no signing on for the dole. You have to stick with it."
He will add: "It hasn't been easy to find £1bn but it is the right thing to do. But young people have to meet us halfway."
Some employers have called for a National Insurance holiday to encourage employment, but the government says its subsidies are worth four times that.
Shadow work and pensions secretary Liam Byrne accused the government of adopting the wrong strategy and said the crucial question was 'where is the money going to come from?'.
He said: "If the government is slashing working families tax credits to pay the bill for this new scheme, it beggars belief.
"That tells you everything you need to know about how out of touch the government is with the needs of our young people and squeezed middle families across Britain.
"Labour's five-point plan for jobs includes a jobs fund that would create 100,000 jobs, but it would be paid for by a tax on bankers' bonuses."
Dr Adam Marshall, director of policy at the British Chambers of Commerce, said the government had to make it easier for businesses to hire young people.
"Employers often spend a large amount of time and money training up those young people not in education, employment or training. The proposal to pay employers half of the minimum wage payment for the first six months will help businesses offset this cost," he said.
TUC general secretary Brendan Barber said he welcomed some elements of the plan, such as the job subsidies, although they were "long overdue".
"But the massive expansion of the work experience scheme is much less positive, unfortunately.
"There are already widespread reports of young people on the programme being exploited. Keen unemployed youngsters desperate to find work shouldn't be conscripted into edging out other workers who should have been paid the going rate for the job."