The Big Lottery Fund will spend £11.25m on the development of the social impact bond, including £6.25m for the first pilot, which is set to take place in Peterborough.
The bond allows third sector organisations to attract finance for projects backed by the promise of a payout to bond holders based on the success of the scheme.
The BLF has pledged that it will provide £1m to set up the Peterborough scheme, which will work with former prisoners to prevent reoffending, and another £5.25m to pay out to bond holders if the project is successful.
It will also spend a further £5m on developing at least three more pilots in other sectors.
Peter Wanless, chief executive of the BLF, said his organisation was interested in supporting the bond project because it was an effective financing tool for preventative projects.
"This shines a spotlight on preventative work," Wanless said. "It's good to be spending on a more preventative function.
"These projects will give us plenty of learning to show whether the social impact bond is a tool that works, and give plenty of third sector organisations a real opportunity to show what they can do."