The £20m pilots will run for at least two years in three local authority areas.
Two areas will pilot offering free school lunches to all primary school children and the third area will test extending eligibility to meals to more pupils in primary and secondary schools. All three pilots are intended to evaluate how free school meals affect the education and health of children.
Balls said: "The pilots will help us to discover whether offering free school meals has an impact on child health and obesity, behaviour and performance at school and eating habits at home. The pilots can help us have a better understanding of the value for money of free school meals for all and test whether we have the current eligibility right."
According to the School Food Trust, hundreds of thousands of children currently do not qualify for free school meals despite being classed as living in poverty.
The government also wants to increase take-up of free school meals among children and young people currently eligible. A School Food Trust report calculates 334,000 school pupils who could have a free school meal are not currently registered and another 210,000 are registered but don't take up their entitlement.
Fear of being stigmatised, the choice and quality of meals, and the dining environment are all factors that lead some eligible children not to take free school meals, according to the report.
In order to qualify for the pilot a local authority area must have at least 15 per cent of pupils currently eligible for free school meals and average take-up must be less than 50 per cent. Funding will depend on the size of the local authority area. There is an option to extend all pilots for a further year.
News
Bids requested for free school meal pilots
Local authorities and Primary Care Trusts are being asked to submit joint bids to run free school meal pilots starting in September.
