The Korean government and private companies are planning to order 140 ships powered by LNG to support small and medium-sized domestic yards.
The scheme is part of a series of measures to help shipbuilders struggling for new contracts, the Yonhap news agency reported.
The vessels will be ordered by 2025, including two next year.
The deals will create a market worth around KRW 1 trillion ($890m) for the yards.
The government and the private sector will also invest KRW 2.8 trillion by 2025 to build infrastructure for the ships.
In addition, the state announced new financing of KRW 700bn and a one-year roll-over of KRW 1 trillion of existing debt guarantees.
"South Korean shipbuilders are expected to win new orders worth 12m cgt this year, a level close to their 2014 records," industry minister Sung Yun-mo said.
"A full-fledged recovery is expected to start in the second half of next year, when they begin work on new orders."
In April, the government announced a plan to order 200 new vessels by 2020 as it seeks to boost domestic yards and owners following years of depression.
Deals for 140 bulkers and 60 boxships were on the cards.
