The Rolls-Royce Science Prize will allow schools and colleges to compete for a pound;15,000 prize for new ways of teaching science.
The scheme is the company's response to Chancellor Gordon Brown's call for the industry to help the Government to promote science.
The programme, to be supported by The TES, will operate on a two-year rolling cycle. In the first year, small teams of school staff, parents and governors, led by teachers, will devise science teaching proposals for their school or college.
The following year, shortlisted teams will receive financial support from Rolls-Royce and help from a specialised mentor to implement their proposals over two terms. They will be judged by senior science education advisors with the runner-up receiving pound;10,000.
Mr Brown said the scheme recognised the "vitally important role that teachers play in sparking children's interest and enthusiasm in science".
It follows the Treasury-commissioned review by Sir Gareth Roberts of science, engineering and technology in 2002, which found the number of students studying science at A-level had fallen dramatically, that teachers were least confident about the physical science elements of the national curriculum and that pupils viewed studying science as narrowing their options.
Sir John Rose, Rolls-Royce chief executive, said: "We need talented young scientists and engineers to ensure we remain competitive." For more information about the prize go to www.rolls-royce.com.