Hundreds of thousands of homeowners will receive vouchers of up to £5,000 for energy-saving home improvements, with the poorest getting up to £10,000.
Chancellor Rishi Sunak is due to set out a £2bn grant scheme in England for projects such as insulation as part of a wider £3bn plan to cut emissions.
The Treasury said the grants could help to support more than 100,000 jobs.
Labour said renters appeared to be left out and called for a "broader and bigger" plan to cut carbon emissions.
It comes ahead of a summer statement from Mr Sunak on Wednesday, in which he could announce changes to stamp duty and VAT.
Business leaders and a former chancellor have called for radical action to bolster the economy, which is still reeling from the impact of coronavirus.
Under the Green Homes Grant, the government will pay at least two-thirds of the cost of home improvements that save energy, the Treasury said.
For example, a homeowner of a semi-detached or end-of-terrace house could install cavity wall and floor insulation for about £4,000 - the homeowner would pay £1,320 while the government would contribute £2,680.
The scheme will launch in September, with online applications for recommended energy efficiency measures, along with details of accredited local suppliers.
Once one of these suppliers has provided a quote and the work is approved, the voucher is issued.
Speaking to BBC Breakfast, Business Secretary Alok Sharma added that the poorest households could receive up to £10,000 towards costs, and that double glazing would also be covered by the scheme.
He continued: "What [the scheme] ultimately means is lower bills for households, hundreds of pounds off energy bills every year, it's supporting jobs and is very good news for the environment."
The government said about half of the fund - which is due to be spent in one financial year - will go to the poorest homeowners, who will not have to contribute anything to the cost. Better insulation could save some people £600 a year on energy bills, the Treasury said.
Mr Sunak said the investment would also help to "kick-start our economy" by creating thousands of jobs and providing business for existing skilled workers, as the UK recovers from the economic shock of coronavirus.
"As Britain recovers from the outbreak, it's vital we do everything in our power to support and protect livelihoods across the nation," he said.
Other measures expected in Wednesday's summer statement:
- The government will pledge to provide 30,000 new traineeships to get young people in England into work, giving firms £1,000 for each new work experience place they offer
- According to reports, there could be a short-term VAT cut for the ailing hospitality industry to help lift demand
- However, the Observer reported that plans to give all adults £500 and children £250 in vouchers to spend on hospitality were being considered as an alternative
- The chancellor is also likely to announce a stamp duty holiday, reportedly aimed at first time buyers.
The grants are part of a wider £3bn "green investment" package due to be announced in the chancellor's summer statement on Wednesday, to support efforts to rebuild the economy after the pandemic.
The plan aims to create tens of thousands of new jobs while helping the UK meet its 2050 target of achieving net zero carbon emissions.
It will involve improving insulation in public buildings such as schools and hospitals and retro-fitting low-carbon heating technology to social housing.
The Conservative manifesto had pledged £9.2bn for improving the energy efficiency of low income housing and public buildings.
Shadow business secretary Ed Miliband welcomed the plan but stressed that it was not "comprehensive".
"It appears there is almost nothing for the people who rent the 8.5 million homes in the social rented sector and private rented sector, which has the worst energy efficiency standards. That means one-third of people are left out," he said.
Mr Miliband said the government needed "a much broader and bigger-scale strategy" to meet its target to reduce carbon emissions to net zero, including investing in nature conservation, increasing renewable energy, supporting manufacturers to be greener and improving transport.
Meanwhile, Rosie Rogers, senior political advisor at Greenpeace UK, said the UK still wasn't "playing in the same league" as other countries, such as Germany, which is investing €40bn (£36bn) in green jobs and energy efficiency, or France, which pledged €15bn to tackle the climate crisis in June.
The UK Treasury said the figures are not like-for-like.
Calls for radical action
Ahead of Wednesday's summer statement, former Chancellor Philip Hammond told the BBC's Today programme that Mr Sunak faced an extraordinarily complex challenge in reviving the economy.
He said Mr Sunak would need to support viable businesses affected by shutdowns, but also help "a transition" for businesses that are no longer economically viable.
"Some businesses will close, some viable businesses will close units," he said.
Mr Hammond added that "the other great unknown" is that "we don't know what the trajectory of the disease itself is going to be".
He said the economy was likely to start to bounce back quickly as restrictions are lifted, but that would tail off, and some parts of the economy such as hospitality, aviation, and entertainment could take years to recover.
Meanwhile Alison Brittain, chief executive of Premier Inn owner Whitbread, said it would be "enormously helpful" if Mr Sunak took action to support the hospitality sector on Wednesday.
"Anything about VAT relief for guests and customers would be great," she told BBC Breakfast.
"Anything on rates relief, still, because the business rates holiday was enormously important for the sector and if we could extend that a bit longer, that would be equally helpful to us."