The Apprenticeship Bursary scheme will be a transitional scheme in advance of the new EYE qualification, which was set out in 'More Great Childcare' and will start in 2014.
From September, early years students will be able to apply for up to £1,500 with a further £300 available for more training.
The scheme is also intended to support the delivery of places for disadvantaged two-year-olds. To be eligible for the funding apprentices must be taken on in a nursery or early years setting that will be providing early learning places for two-year-olds.
Apprentices will also need to have a minimum of grade C in Maths and English at GCSE.
Applicants will need to be enrolled on the Level 3 Advanced Apprenticeship in Children and Young People's Workforce to be eligible.
The scheme will be run by the National College for Teaching and Leadership.
The apprenticeships will be expected to last an average of 20 months and students will undertake a combination of work and study to gain a recognised qualification through further education colleges.
Education and childcare minister Elizabeth Truss said, 'Caring for and educating young children is a fantastically rewarding job. The bursaries announced today will make it easier for talented people to start a career in early education.
'Providing good quality early education is proven to help young children get a head start in life, especially those who are from poorer backgrounds.
'I hope these bursaries encourage students to consider working in early education.'
David Pomfret, principal of the College of West Anglia said that he hoped that the bursaries would encourage more people to train for a career in the sector, which he said was a growth industry.
'We have seen a significant increase in the number of young people taking childcare courses at the college in recent years and are about to launch a new range of work-based apprenticeships in early years to provide further opportunities.'
The Government consultation on the eligibility criteria for the new Early Years Educator qualification closed last month. The Department for Education said it will publish the findings and new criteria soon.
- More details of the apprenticeship scheme will be available on the National College for Teaching and Leadership website shortly. Prospective applicants can also email firstname.lastname@example.org for more information.
- For the latest news, analysis and comment on the Truss reforms read Nursery World's Big Issue: More Great Childcare.