Some young offenders will be held in "secure schools" rather than youth jails under an overhaul to be launched by the Government.
Justice Secretary Liz Truss is poised to unveil plans for two new pilot facilities as part of efforts to put education at the heart of rehabilitation and drive down reoffending rates.
She will commit an additional £15 million a year for youth custody which will also aim to boost frontline staff and reduce violence.
At the centre of the shake-up is the launch of two new secure schools, where youngsters will receive tuition in core subjects including English and maths and have access to work training and apprenticeship schemes to help them find jobs on release.
The schools will be run in addition to other facilities in the youth custody estate. It is understood the Ministry of Justice is still considering how they will be operated and how many individuals they will hold.
The plans are part of the Government's response to a review by child behavioural expert Charlie Taylor, which will be published on Monday.
Ms Truss said the review sets out the "stark issues we must tackle to help young offenders to live law-abiding lives".
She said: "Prisons rightly punish people who break the law, but they should also be a place where offenders are reformed.
"While young people are in custody we need to make sure they get the right education and training so they can lead law-abiding lives - and, in turn, make our streets and communities safer too.
"The measures I have set out today are the beginning of a series of reforms which will help us cut reoffending, make our communities safer and create a justice system that works for everyone."
Mr Taylor's interim findings, released in February, called for "fundamental change" to the youth custody system and raised the possibility of creating secure schools which would be set up in a similar way to alternative provision free schools in England.
Children in public sector young offender institutions (YOIs) were only receiving 17 hours of education every week on average, compared with an expected level of 30 hours, Mr Taylor found.
His interim report said around 40% of those detained in under-18 YOIs have not been to school since they were 14, while nearly nine out of 10 have been excluded from school at some point.
As part of the overhaul a youth custody apprenticeship scheme is being developed in a bid to ensure all young people are "earning or learning" on release.
Young offenders' progress in education will be measured, as well as improvements in health and behaviour, to gauge the performance of establishments.
A single head of operations post will be established to take charge of youth custody, while plans are being devised to give every child a mentor when they leave custody.
Mr Taylor welcomed the plans. "Education needs to be central to our response to youth offending. It is the building block on which a life free from crime can be constructed," he said.
"If children who offend are to become successful and law-abiding adults, the focus must be on improving their welfare, health and education - their life prospects - rather than simply imposing punishment."
There are five YOIs and three secure training centres for young people in England and Wales.
The under-18 youth custody population has fallen below 1,000 in recent years but reoffending rates have risen, with two in three juvenile offenders committing a new offence within a year of release.