The fund will be announced by Prime Minister Theresa May on Monday as part of a drive to help young people from disadvantaged backgrounds into work.
She is expected to slam the sharp disparities revealed in a racial disparity report released last October and pledge more funding to improve opportunities.
Mrs May is due to speak at a Birmingham-based charity that helps young people into work, inviting organisations like it to apply for the money.
It is being funded by cash seized from UK bank accounts that have remained dormant for more than 15 years.
On her visit, the PM will say unemployment racial disparities among young people “blights communities and wastes talent and potential”.
She is expected to say: “Too many young people from deprived and ethnic minority backgrounds face barriers preventing them from entering the world of work.
“Talent, ability and hard work should be the only factors affecting a young person’s ability to get on in life – not their background or ethnicity.”
Mrs May will point to young people from ethnic minorities are twice as likely to be unemployed as their white peers.
The money will “help address the barriers holding many young people back”, she will add.
Nine workshops will also be set up in England – with two regional events in the north and south – to let young jobseekers have their say on how the money should be allocated.
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A new Race Disparity Audit Advisory Group has also been set up, led by founder of Operation Black Vote Simon Woolley.
It will be charged with steering government departments to oversee “interventions” to tackle race disparities in youth unemployment.