The new scheme, know as Bridging Two Worlds, will be managed by Mazhar Malik, who is an associate member of the UK Islamic Mission and voluntary director of the Foundation for Islamic Learning.
"Charity Bank research established that Muslim charities were actively excluding themselves from mainstream finance because of its basis in interest, which is not allowed by Islam," said Malik.
"We are going to develop models of finance that are compatible with Sharia law."
The prime focus of the project will be to create ways of providing non-interest bearing savings and post-investment support for Muslim projects.
Mark Howland, head of marketing at Charity Bank, said: "Research indicates that Muslims have considerable difficulty in finding financial products that do not force them to compromise their beliefs.
"With Charity Bank's commitment to alleviating financial exclusion through the development of social finance, we are ideally positioned to meet Islamic financial needs."
Malik's salary and the programme's initial capital are being supported by the Friends Provident Foundation.
Dar Al Istithmar, a Muslim finance consultancy, will provide its services for the scheme free of charge.