Trailing incumbent Jeremy Corbyn in the polls challenger, Owen Smith is to propose scrapping university tuition fees to appeal to younger voters.
Smith is to make the pledge, along with a scheme to build starter homes for those aged under 30, as the Labour leadership contest continues.
Smith is to make the announcement when he visits Nottingham University as he condemns the Conservatives for "betraying a generation".
Smith's plan is to replace tuition fees with a graduation tax, whereby graduates pay an extra one to two per cent on taxable income above £15,000 for a specified period.
On housing, he wants to reserve 50,000 of a proposed 300,000 new homes for first-time buyers under the age of 30. Tenants would have long-term tenancies – between five and eight years – and 20 per cent of the rent would be put toward a deposit on the eventual purchase.
Smith will say: "Young people have been let down time and time again by this government. Our failure to give the next generation the best start in life possible is the great scandal of our time.
"The promise that each generation stood a chance of doing better than the generation before has been shattered. Young people today are more likely to be unemployed, less likely to have an apprenticeship, more indebted and less likely to own their own home. They have been given a rotten deal and we must turn this around."
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Smith also wants to put forward an apprenticeship guarantee and paid traineeships to guarantee all 18-year olds with A-levels a two-year apprenticeship with a living wage income.
The announcement will come as Smith continues to battle Corbyn for the crown of the Labour party. Bookies and pollsters alike predict a Corbyn victory.
A recent poll also found that Corbyn leads Theresa May by a wafer-thin margin among young voters, according to Yougov, but the Tory leader has an overwhelming lead among those of retirement age.