Overseas Olympic and Paralympic teams will be awarded grants totalling £9m to encourage the use of UK-based training camps ahead of the London 2012 Games.
Teams will be able to apply for up to £26,000 towards the cost of preparing their athletes at UK-designated camps.
"This represents a very special opportunity for us all to reach out and welcome the world's athletes to the UK," said 2012 chairman Lord Coe.
He said it put athletes' welfare "at the heart" of planning for the Games.
The Pre-Games Training Camp Grant Scheme will enable all 203 National Olympic Committees (NOCs) and the 161 National Paralympic Committees (NPCs) to apply for credit.
Grants will only be awarded to teams that use approved UK training camps that feature in the Pre-Games Training Camp Guide to be issued in 2008.
The grants will help athletes from smaller nations who would not otherwise have the financial resources to use pre-Games training camps
Debbie Jevans, London 2012 Organising Committee
"We have always been serious when we said that we wanted the London 2012 Games to be the sporting experience of a lifetime for all competing athletes," said Lord Coe.
"Our grant plan is one example, but an important one, of how we plan to honour that pledge and place the welfare of athletes at the very heart of planning for the Games.
"That is our commitment to the world's athletes and we won't let them or their countries down."
It is hoped that in offering incentives to train in the UK rather than abroad, Games-related benefits for London and the UK will be maximised.
"This represents a special opportunity for us all to reach out and welcome the world's athletes to the UK, to showcase our towns, cities, regions and nations and form friendships that will last a lifetime and bring us all closer together through sport, in the true Olympic spirit," Lord Coe added.
Debbie Jevans, director of sport at the London 2012 Organising Committee, said: "The grants will be allocated fairly and equitably and will be given to off-set the cost of essential services such as facility use.
"The grants will help athletes from smaller nations who would not otherwise have the financial resources to use pre-Games training camps."
British Olympic Association chief executive Simon Clegg said: "When you consider that half of the 203 national Olympic committees compete with 10 or less athletes, this generous grant will ensure many of the teams' entire pre-London preparation camp needs will be covered."

Schumacher's Ferrari suffering engine failure to win the Japanese Grand Prix at Suzuka and put him within touching distance of retaining his world title.

It is the first time the German has suffered such a problem in five years and it couldn't have happened at a more crucial time.

The race had looked Schumacher's for the taking but disaster stuck on lap 37 when, shortly after leaving the pits, smoke began billowing from his Ferrari, putting him out of the race.

The victory for Alonso means he now only needs to finish in the top eight at the Brazilian Grand Prix to take back-to-back titles.

The odds have now moved dramatically back in Alonso's favour. Shumacher, who was favourite before the Japan race is now out to 9-1 with skybet with Alonso 1-25.

Noel Baxter is having his funding cut before he reaches his primeBritish ski chief Jason Cockburn has accused UK Sport of being short-sighted after the alpine skiing funding budget for the next four years was slashed.
The budget up until the 2010 Winter Olympics in Vancouver has been reduced from £1.72m to £922,000.
Cockburn, Snowsport GB's chief executive, told BBC Sport: "We are disappointed by the decision.
"It will have an adverse effect on our up-and-coming athletes and I believe it is short-sighted."
Cockburn said it will be youngsters who are targeting the 2014 and 2018 Games who will see their programmes cut.
We are having to concentrate on the athletes who are performing at the top level now instead of the potential stars of the future
Jason Cockburn
And the men's technical programme - which features slalom skiers Alain and Noel Baxter - will also suffer too.
Cockburn said: "UK Sport are increasing funding for the 2012 summer Games because they are being held in London.
"Just two years later there will be more focus on British athletes at the Winter Olympics but that is when the impact from the reduced funding will be very evident, and that is a shame.
"We are having to concentrate on the athletes who are performing at the top level now instead of the potential stars of the future."
As well as cutting the overall budget, the Baxter brothers will no longer receive Talented Athlete Scholarship Scheme (TASS) individual sponsorship cash because their World Cup and Olympic results were not good enough.
Only downhill skiers Finlay Mickel and Chemmy Alcott and snowboarder Zoe Gillings will receive this.
UK Sport had stipulated it wanted top-eight results at the 2006 Winter Olympics to guarantee extra funding but Britain's best skiing result was Alcott's 11th in the women's downhill.
Cockburn added: "We were aware of the targets but it just did not happen at the Olympics.
"Noel has had credible results at two Winter Olympics now and he is only 24 yet his funding is being cut.
"If you look at the top 10 male downhill skiers in the world, their average age is 32, so we need to keep funding our athletes.
"This means we will have to try and get more commercial income to keep British skiing performing at the highest level." UK Sport announced an overall 20% increase for winter sports with bob skeleton and curling, which have been Britain's most successful events at the last two Olympics, receiving the bulk of the cash.