Chard, in Somerset, will run the first "community justice panel" pilot, which was launched by the Liberal Democrats at their conference last week.
The project, run by a Liberal Democrat-controlled council, is backed by 40,000 from the Home Office and the Government Office for the South West.
Adults who have committed minor offences, such as drunkenness and antisocial behaviour, will choose between appearing before the local magistrates' court or the community panel.
Many offenders are expected to be between 18 and 25, as this group is responsible for a large proportion of these offences.
The panel will comprise volunteers from Somerset.
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