Failed asylum seekers will be offered up to £3,000 to move to Rwanda under a new voluntary scheme, The Times reports.
The plan will be open to anyone whose asylum claim has been rejected by the UK. It is different from an existing voluntary returns scheme, where failed asylum seekers receive cash to return to their home country.
The new plan will focus on those who cannot return to their home countries.
The government is already trying to implement a separate scheme under which people deemed to have arrived illegally in the UK would be deported to Rwanda.
That plan had been blocked by the courts, which raised concerns about Rwanda's safety.
In order to overcome those objections, the government is currently trying to pass its Safety of Rwanda Bill, which would deem the East African country to be a safe place.
The bill recently faced opposition from the upper house of parliament which demanded greater protections to be introduced before deportation flights can take off.
However, this new arrangement would be voluntary and therefore not dependent on the bill being approved by Parliament, BBC reports.
A Home Office spokesman told BBC that they are exploring voluntary relocations to Rwanda for those who have no right to be in the UK.
Failed asylum seekers who choose to be relocated would be allowed to legally work in Rwanda and get additional support upon arrival.
The scheme will also be opened up to other people with no right to remain in the UK, and foreign criminals.
Labour's shadow immigration minister Stephen Kinnock has criticised the proposed scheme. He said the present government has realised that its Rwanda scheme is not going to succeed, so they are paying people to go there.
Piyush Goyal and Jonathan Reynolds tour the Royal Opera House in London
