Chancellor George Osborne will set out a fresh spending squeeze in Wednesday's autumn statement, to fund new schools, science and transport schemes.
Most government departments will be asked to save an extra 1% next year and a further 2% the following year.
This will release £5bn to be spent on capital projects, sources suggest.
They say the government wants to spend more money on "shovel ready" building projects in an effort to kick start economic growth.
Treasury sources say £1bn will go towards building 100 new free schools and academies, creating an additional 50,000 new school places.
Health, education, international development, HM Revenue and Customs and nuclear decommissioning will be protected from this latest squeeze.
Frontline services in all other departments will also be shielded with a bulk of the savings coming from administration and back office staff, government sources say.
But Whitehall departments will be expected to cut day-to-day spending by 1% (£950m) in 2013/14 and 2% (£2.5bn) in 2014/15.
Under the plan, the government believes it will be able to spend more annually on capital investment, as a proportion of GDP, than Labour did when it was in power.
'Taking longer'The decision to cut Whitehall budgets comes after a mid-term spending review carried out by Chief Secretary to the Treasury Danny Alexander, which suggested many departments were over-achieving on planned savings.
- One of the two major statements the Treasury has to make to Parliament every year
- Governments decide what form they take and when to make them, so there have been many changes over the years
- Since 1997 the main Budget - which contains the bulk of tax, benefit and duty changes - has been in the spring before the start of the tax year in April
- The second statement has tended to focus on updated forecasts for government finances
- Over the past few years this distinction has become blurred, with the Autumn Statement becoming more of a mini Budget
- Under the last Labour government it was called the pre-Budget report
Departments have under-spent by a total of £3bn over the past two years, the review found, reassuring Mr Osborne that it would be possible to divert spending into more economically valuable areas.
The Treasury believes there may be scope for further efficiencies. If all departments reduce their administrative spending by the same amount as the Department for Education, they would save almost £1bn by 2014/15, sources said.
Mr Osborne and Mr Alexander briefed the cabinet on the plans on Tuesday morning, which will be confirmed in the autumn statement, when Mr Osborne updates MPs on the state of the nation's finances.
The Office for Budget Responsibility (OBR) is expected to downgrade its forecasts for growth in figures released to be alongside Mr Osborne's statement.
If the figures are as bad as many expect, the chancellor could miss his targets for paying off Britain's debts.
On Sunday, Mr Osborne admitted cutting the deficit was "taking longer" than planned.
'Extra classroom places'
The new money for school places comes on top of the government announcing a £2bn Priority School Building Programme, which will fund 261 school rebuilding projects in England over five years.
An initial 42 schools, among the most dilapidated, were named in a first wave.
This scheme replaced the previous Labour government's Building Schools for the Future project, which had been expected to cost £55bn, but which was scrapped by the coalition government.
Extra classroom places are likely to relieve some of the increasing pressure on primary schools, particularly in London and the big cities, where a surge in the birth rate has seen primary schools struggling to cope with the rising demand.
Official figures published earlier this year showed that there would need to be places for an extra 450,000 primary school pupils in England by 2015.
Many schools have had to add extra classrooms - and a growing number of primary schools will have to expand to more than a thousand pupils.
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