The £5bn initiative is the largest payment-by-results scheme ever run by government. For the first time all welfare-to-work providers will be paid through the benefit savings made from the people they help find employment.
Providers will have the freedom to design tailored support for individual clients and extra money will be paid to those who get the "hardest to help" people off benefits and into work.
Grayling claimed the Work Programme represents a radical change to the way back-to-work support is delivered.
"For the first time, those charities and voluntary sector organisations across the country with the know-how to help people with real difficulties in their communities get back to work are being given the chance to do just that," he said.
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