Safe houses where protection would be given to gang members wanting to break out of violence could be set up in major cities.
The plan follows an upsurge in the numbers of youngsters being killed in apparent feuding between rival teenage groups.
Residents have blamed gang warfare for the shooting of 16-year-old Jonathan Matondo, whose body was discovered three days ago in a park in Burngreave, Sheffield.
The Home Office identified London, Liverpool and Birmingham as "hotspots" of gang activity. Undercover police surveillance operations will be mounted in these cities, which account for more than half of the gun crime in England and Wales.
Safe houses could also be set up in these areas. Members trying to escape gangs would be sheltered and given advice and protection could also be offered to victims wanting to give court evidence against gang leaders.
The suggestion of safe houses as part of a "gang exit strategy" was floated by MPs in a report into young black people and the criminal justice system.
They blamed gang culture for some of the problems, along with poverty, school problems, family conflict and lack of positive role models.
In a joint response, the Home Office and the Ministry of Justice agreed safe houses "may be an appropriate response". Jacqui Smith, the Home Secretary, said: "We want to better understand why some young people join gangs and go on to become involved in more serious knife and gun crime.
"We are working vigorously to build confidence in the criminal justice system among black and minority ethnic communities, but we recognise that there is more to do."
The Home Office ordered action last month after 11-year-old Rhys Jones died after being caught in crossfire between rival groups in Croxteth, Liverpool.