Chief Minister Sheila Dikshit said under the 'Dilli Annashree Yojana' the cash subsidy would be transferred directly into the bank account of the senior-most female member of a family.
"We will launch the Delhi Annashree Yojana on December 15," Dikshit said at the sidelines of a programme.
The Chief Minister said the scheme would go a long way in making Delhi a hunger-free state.
"A food subsidy of Rs 600 per month would be transferred directly in the bank account of the senior most female member of the household to enable the family to purchase foodgrain of their choice," she said.
The government will spend around Rs 150 crore in the current fiscal for the scheme. There are around four lakh households getting subsidised food items under BPL and AAY schemes.
Dikshit had announced the scheme while presenting the annual budget in May.
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Officials said government was considering to offer the cash subsidy to the four lakh beneficiaries who are currently getting subsidised food items.
The city government has been favouring cash transfer to beneficiaries instead of subsidised food grains and had even sought an option of direct cash transfer to BPL families instead of foodgrains in the ambitious Food Security Bill, which is being vetted by a parliamentary panel.
Last year, the Delhi government had opposed certain provisions of the Bill saying the proposed universalisation of foodgrain entitlements to majority of the population would be very "difficult to implement".
In a letter to Union Food Minister K V Thomas, the city government had said corruption was rampant in the public distribution system and desired results would not be achieved if no structural changes were made in distribution mechanism.
The Food Security Bill seeks to provide a legal entitlement to subsidised foodgrains to 75 per cent of the country's rural population and 50 per cent of urban India.