Groups of young people that take part in the project, called Keyfund, will get the chance to put their ideas past a panel of judges to fund four projects.
The money on offer rises from £250 for the first project to £2,000 for the last. During the four stages, young people will develop a range of skills such as negotiating, dealing with stress and evaluating performance.
John Anderson, London Youth’s head of youth action, said: "Keyfund is a unique and fun way of enabling young people to gain important transferable skills.
"Leading, designing and delivering their own projects greatly enhances the confidence of the young people who take part. It also directly benefits the local community through improved facilities and more engaged citizens."
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