The Deputy Prime Minister made the announcement via videolink to members of Citizens UK's south London assembly.
He said: "I can confirm that the government will be making an announcement by Christmas on how we will end the detention of children for immigration purposes for good. It's a big culture change that puts the needs of children before sounding tough on immigration, but it's long overdue."
The government is looking to pilot alternative ways of dealing with families in the immigration system.
Clegg said that he wanted to ensure that "every family that comes into the immigration system is treated with respect".
He added: "And where difficult decisions are needed over their future every possible avenue is explored with independent experts helping to ensure we uphold the welfare of the children involved."
A spokesman for The Children's Society and Bail for Immigration Detainees said that Clegg's comments were reassuring, but added that "we are deeply concerned that the abhorrent practice of immigration detention of children will continue in this country and that no date has yet been set to end it".
The two groups, which have formed the Outcry! Campaign to end immigration detention for children, are calling for an immediate end to the practice and point out that, since May, 100 children have been detained for immigration reasons.
Jonathan Cox, lead organiser of Citizen UK's refugee campaign Citizens For Sanctuary, said: "We are delighted that the pledge on ending child detention will be acted on. We would prefer it sooner rather than later but realise that an alternative way of dealing with families needs to be in place."
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