The money will be matched by the Government and the fund will be set up in April - 16 months before the Premier League's new TV deal starts in August 2001. The total fund could top pounds 20m in its first year.
Government sources said yesterday that the Premier League had agreed to pay 5 per cent of its income from the deal into the new fund, which is expected to amount to pounds 7m in the first year.
Mike Lee, a spokesman for the Premier League, confirmed that the league had also made a commitment to continue this level of funding in future years.
The money will go straight into making improvements to football facilities in schools and parks all over the UK, which are in dire need of new investment.
A recent report by the Football Task Force found that facilities in some places lacked hot and cold running water, good drainage and pitch markings. At pitches in one inner city area, players were forced to change in shipping containers.
Funds from pools betting duty will also be diverted from the professional game, where it has been used to improve grounds following the Taylor Report.
The aim of Chris Smith, the Secretary of State for Culture, Media and Sport, is to use the fund to put in place a new generation of modern football facilities in all parts of the country, in line with the FA's blueprint for the future of the game set out by its technical director, Howard Wilkinson.
The Charter for Quality is a long-term strategy to improve the health of the English game and give the country a better chance of success in the 2006 and 2010 World Cups.
Among facilities that the new money will help pay for are:
t New "mini-soccer centres" for the Under 11s.
t New floodlit synthetic pitches available for use by schools and local communities.
t Improvements to grass pitches and changing facilities.
Mr Smith believes the new funding arrangements for football could provide a model for the grassroots development of other major sports.
The Government's sports strategy, published in the New Year, is expected to require all sports to re-invest at least 5 per cent of TV income, and preferably more, in the grassroots.
A Department source said: "It is an important principle that people working hard to support football at its grassroots should see the benefits of wealth generated at the top of English football."
He added: "This is about long-term vision. It is by investing now in schools and parks and pitches that we will give England the best chance of success in the future World Cups."Reuse content