The programme aims to boost long-term pay prospects of young people in disadvantaged areas, dedicating extra time and resources to those facing the "biggest hurdles to getting a job", the Department for Work and Pensions announced.
Manchester and the West Midlands will receive up to £1.2m from the scheme, with the remainder earmarked for a separate pilot mobile job app initiative.
Following a pilot programme coordinated by West Midlands mayor Andy Street, youth employability coaches will continue to support young people into work and for up to six weeks after they start a new job.
The mentors will help young people build employability skills and encourage them to stay in work.
It is the latest attempt by the government to tackle youth unemployment figures.
Latest data shows there were 488,000 young people aged 16-24 unemployed for the period May to July, a slight rise from the previous quarter but around the same as the year before.
Announcing the funding, work and pensions secretary Dr Thérèse Coffey said the investment in technology would drive young people to skill up for higher-paid vacancies.
These digital applications would also provide local areas with information on local skills supply and demand.
"We've seen 3.7m more people in work since 2010 and wages outpacing inflation for a year and a half now, but I want to ensure we're always looking at new ways to help anyone no matter the barriers they face into a good job," said Coffey.
A report released last week by the children's commissioner for England showed the number of children leaving school without basic qualifications by the age of 18 had risen by nearly a quarter since 2016.
The study found almost one in five children (18 per cent) left school without reasonable GCSE grades in five subjects, a rise of 24 per cent since 2015.