A fund to create 4,000 jobs for young people will be a key Labour pledge at the Welsh assembly election.
The party said the £25m fund would help create jobs in the public and voluntary sector for under-25s.
Figures released on Wednesday showed UK youth unemployment was at a record high.
Welsh Labour leader Carwyn Jones said his party wanted to make sure there was no "lost generation".
Labour has attacked the UK government for scrapping the future jobs fund, which paid employers to take on the long-term unemployed.
But Prime Minister David Cameron has criticised the previous government's scheme for not creating enough jobs.
The Welsh fund would be available to employers who hire young people out of work for at least six months.
Mr Jones said: "This pledge is the offer of a real job for those young people who will find it hardest to secure employment in these tough times.
"Welsh Labour will ensure that there will be no lost generation whilst we remain in government in Wales."