Adoption agencies will be given extra cash to address the shortfall of adopters so children who need them find homes more quickly.
The £16 million funding - available from later this year until 2016 - will help new and existing voluntary adoption agencies (VAAs) to develop new and creative ways to recruit more adopters.
The funding will provide a much needed boost to the recruitment of adopters by VAAs, and could see the sector recruit as many as 2,000 prospective adopters a year by March 2016.
Children and Families Minister Edward Timpson (pictured), who has two adopted brothers himself, said: "There are still over 4,000 children waiting to be adopted nationally, and we cannot stand by whilst children's futures hang in the balance. This is why we are taking a closer look at how we are recruiting new parents by giving voluntary adoption agencies a bigger role.
"We know more than 650,000 people would consider adopting right now, yet more than 700 additional adopters are needed each year to keep up with the growing number of children waiting to be adopted."
There are currently 23 VAAs in England, who have recruited and approved over 600 desperately needed parents for the thousands of children waiting for a stable home in the last 12 months. Today's announcement will help VAAs to improve adoption services and respond to the needs of all children - particularly those children who are harder to place.