Groups of 15- and 16-year-olds who are thinking of leaving school this year will learn life skills by living in the house for four days a week.
Young people in Newcastle will be able to chart the housemates' progress via online daily diaries, and a weekly text vote will establish the young person who has contributed most to the project.
The winners will receive prizes donated by Endemol, the maker of the Big Brother TV show.
The project has been developed by Newcastle City Council's play and youth service, Connexions Tyne and Wear and Your Homes Newcastle.
Clara Shields, a youth worker at Newcastle's youth service, came up with the idea for the project. "The young people are of an age when they are able to get their own tenancy," she said. "The skills they learn will help them." If successful, the project will be repeated in 2006.
A youth worker and a Connexions personal adviser will live alongside the young people in the house.
