A team of volunteers will search out material they deem inappropriate on social networks and report it to the new Metropolitan Police unit. The allegations will then be investigated and culprits prosecuted.
"The Metropolitan police service is committed to working with our partners, including the mayor, to tackle all types of hate crime including offences committed online," a spokesperson for the Met police said.
"By establishing this unit, we are sending a strong message to those who use online forums to spread hate that their actions will not be tolerated. The Metropolitan Police service continues to have a zero-tolerance approach to all forms of hate crime.
The unit will cost the Met Police1.7 million pounds to create and will be staffed by five detectives.
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The UK Home Office is also said to be investing 452,756 pounds into a linked Online Hate Crime Hub, which is due to run for two years.
London mayor Sadiq Khan's Office for Policing and Crime (MOPAC) said a consultation on crime reduction had identified the increasing role online hate played in targeting individuals and communities.
The new initiative comes after the June 23 referendum in favour of Brexit saw a 42 per cent rise in reports of hate crimes in the wake of the EU referendum.
Social media companies like Facebook and Twitter will be asked to help fund a "community" element of the project, drafting in volunteers "skilled in the use of social media" to root out online abuse.
However, civil liberty groups have expressed concerns over the new unit.
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