A package of £450 million-worth of rehabilitation contracts have been put out to tender by the Government under controversial plans to privatise the probation service.
Payment-by-results contracts are to be split between private and voluntary sector organisations in 20 English regions and one Welsh region, with responsibility for supervising 225,000 low and medium-risk offenders each year, the Ministry of Justice said.
The National Probation Service (NPS), a new public sector organisation tasked with supervising and rehabilitating 31,000 high-risk offenders each year, is also to be formed.
The competition will continue through 2014, with contracts awarded by 2015.
Private and voluntary providers will only be paid in full if they are successful at reducing re-offending, as well as getting best value for hard working taxpayers.
Justice Secretary Chris Grayling said: "Today marks a crucial step forward to finally cracking our stubbornly high reoffending rates.
"Each year around 600,000 crimes are committed by those who have already broken the law - that is a dreadful figure and I am determined to bring it down.
"The scale of interest in these contracts from so many diverse and creative organisations is extremely encouraging.
"This is great news for the public who will finally benefit from the best of the private and voluntary sectors, working together with the public sector, to cut reoffending."