Guidestar UK, which is based on an American idea, is working in partnership with the Charity Commission to provide financial data about all registered charities.
Charities will then be invited to add their mission statements and information about their fundraising and targets. They will also be able to upload e-newsletters and create links to their own web sites.
"This is an excellent example of a sector-led initiative to achieve greater transparency," said Rosie Chapman, director of policy at the Charity Commission. "Guidestar is an exciting opportunity for the sector to develop something which will be of immense use to stakeholders."
The site is expected to launch in 2004 and will have a broad user base.
Charities will be able to use it to fulfil paperwork for funding applications and grant makers will be able to investigate applicants.
If Guidestar UK follows the US site, charities may also have access to extended services such as free classified ads and access to web site developers who will improve their sites for free.
Guidestar UK spokesperson Jocelyn James said: "These services are not prominent in the initial plan, but we'll consider them later."