The "village" aims to ease the transition of Year 7 and 8 pupils to Cramlington community school in September next year. The arrival of 650 children at the 13 to 18 school is the result of the abolition of local middle schools.
Cramlington is one of 14 secondary schools to receive grants this year from an initiative by the charity Human Scale Education and the Gulbenkian Foundation to help children arriving from primary school to adjust.
"We want to make the whole experience as different as possible to being at an ordinary school," Mark Lovatt, a deputy head, said.
Children will elect their own mayor, to work with a village forum. At lunchtimes, children will be able to sit out at the street cafe, watching entertainers - performing arts students from across the school - or listening to the radio broadcasts created by the 11 to 13-year-olds or reading their own newspaper. The role of village bobby will be played by the school's community liaison officer.
Mr Lovatt said teachers would visit the "village" for lessons, rather than children travelling across the school to different classrooms.
There will be a "senior learning village" for Years 9 to 11 and an "advanced learning village" for sixth formers.
Sheila Dainton, an advocate for Human Scale Education, said 800 secondaries had expressed interest in the grants of up to pound;15,000; 150 had applied.
Adrian Money, the headteacher of Tideway, a specialist technology college in Newhaven, East Sussex, said such grants would help his staff teach an integrated curriculum for Years 7 and 8. Children starting at the school spent 60 per cent of their time with form tutors, who teach English, humanities, science, information technology, citizenship and drama, he said. The school wanted to extend the scheme to Year 8, so about a third of lessons would be taught by the same teacher.
"The approach has been very rewarding for teachers, and parents love it,"
Martin Bayliss, headteacher of Holyhead, a secondary in Handsworth, Birmingham, said he wanted to divide his school vertically into mini-schools, or "halls", with children of different ages combining for lessons. "It's an exciting time," he said. "This grant will help us develop a new curriculum."