The Government is pumping an extra £60m into the probation service in a bid to ease prison overcrowding.
The emergency cash is said to be needed so judges can have confidence handing out non-custodial sentences.
Justice Secretary Jack Straw is expected to announced the injection in a statement to Parliament next week.
With prisons at full capacity, he has been urging courts to use community orders and "tagging" punishments wherever possible.
But fears have been voiced over whether such sentences can be properly monitored at the moment because of funding shortfalls in the probation service.
A Ministry of Justice spokeswoman said: "Prison is the right place for serious and persistent offenders. But for many of the less serious offenders, community-based punishments are proven to be more effective at reducing reoffending than short-term prison sentences.
"Additional resources are being agreed for probation in order to strengthen community-based punishments where these are more effective than short term prison sentences. Once they have been finalised, parliament will be updated."
Channel 4 News reported that the extra money would total £120m over three years, but it is understood the figure is likely to be half that.
In an email circulated to managers and obtained by the programme, director of probation Roger Hill says: "This additional resource is specifically to promote community orders as an alternative wherever possible to short prison sentences."
