The government will invest 5 million in its ultra low emission vehicle (ULEV) readiness project, meaning all of its car and van fleets will one day run on electricity.
All departments using vehicles will receive funding to review their current vehicle scheme and will be required to consider the benefits of green cars, Transport Minister Baroness Kramer said.
Chief Secretary to the Treasury, Danny Alexander, added: "I am delighted the Government Car Service is leading the move to electric vehicles and I will be one of the first in line to use one. This is the right thing to do, with much lower running costs and close to zero emissions, these vehicles will save the taxpayer money and be much greener."
In the first stage of the plan, due to start in the autumn, 150 electric cars will be introduced, with the vehicles first being used to transport ministers to and from appointments as part of the Government Car Service.
After a successful roll-out, the scheme will be extended to local areas and the government will be encouraging councils, police forces and the NHS to introduce plug-in cars, adding a further 135 cars to the government's collection.
The investment will also cover the installation of plug points to charge the vehicles in places where they are necessary. Cars and vans will be replaced on a like-for-like basis with consideration given to the lifetime cost of replacing vehicles, ensuring public funds are used efficiently.
Baroness Kramer concluded: "Government must lead by example. Today's investment will see government switching a significant number of plug-in cars and vans into our fleets and leading the electric charge."
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