Dundee Community Mediation, a service run by the voluntary organisation Safeguarding Communities: Reducing Offending, will run the scheme.
Two trained mediators will seek to resolve conflict between young people and older residents or rival groups of young people. They will operate on referral from residents, the police, youth workers or the young people themselves.
Bob Ballantine, the service team manager, said: "A likely scenario is a group of young people who are congregating for a chat but who are perceived by older people as a threat."
The specialist initiative has developed out of the core work of Dundee Community Mediation, which resolves neighbourhood disputes. It will be funded by the Scottish Executive.
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