Terror suspects in Britain will be offered council houses, psychological support and help to find a job in a move aimed at turning them away from extremism.
The new government strategy, code-named Operation Constrain, is also intended to help returning militants thought to have fought with the Islamic State (Isis) terror group.
The operation will start next year and will target up to 20,000 extremists previously investigated by the MI5, according to the Mail Online.
"We are planning a number of pilots to explore the best way to diverting such people from terrorism and extremist activity," a Whitehall source said.
Police and social workers will contact people already on MI5's databases to assess what danger they pose to society and the best way to help them integrate.
Counter-terrorism police will personally visit terror suspects in areas where the risk of terrorist activities is high, such as London, Manchester and Birmingham.
The council's housing department will try to put suspected extremists in social housing and may pay their rent in case they do not have a job or suitable accommodation. Suspects could also be given priority on waiting lists.
If they have mental health problems, they will be refereed to the NHS or relevant charities.
A spokesperson for the The Home Office said: "We are reviewing our counter-terrorism strategy to make sure we respond to the evolving threat in the most effective way we can."
The revelations came amid an ongoing debate on how the government should deal with people who travelled to Syria and Iraq to join Isis and are now returning home.
Around 850 British people are thought to have travelled to join Isis. Of these, some 100 died on the battlefield.
As the group is losing territories due to multinational operations in both countries, hundreds of fighters have broken ranks and are trying to return home.
Earlier this month, Max Hill, QC, the independent reviewer of terrorism legislation, said "naive" and "disillusioned" returnees should be reintegrated in case authorities decide they should not face prosecution.
However, Foreign Office minister Rory Stewart said those who left Britain to fight with Isis pose a threat to the UK and should be killed in Syria, rather than being allowed to return.
"The assumption of this operation is that poverty or relative deprivation is a major vulnerabilities push factor," UK-based counter-terrorism expert David Otto told IBTimes UK.
"While this has been evidenced in places like Northern Nigeria and Somalia, the case for providing homes and jobs to suspects as a countermeasure in UK has to be applied on a case by case basis rather than a blanket policy. It may only work if other push and pull factors like foreign policy, a counter-narrative and stigmatisation are considered."
Otto warned the strategy could be counterproductive and may spark resentment among other members of society.
"Young men and women who are in real need of housing and jobs but are not extremists will see this projected policy as encouraging to join the lists," he said.
"Measures to prevent violent extremism must go beyond the narrow narrative that homes and jobs will solve the problem. All solutions must be comprehensive and inclusive of society and not limited to specific communities."