Under the pilot programme, government places young graduates in different workspaces in public, private or civil society organisations for one year.
The scheme aims to create employment avenues for young graduates while building the capacity of national institutions, private sector and other key partners to tap into youth talent.
It is also intended to address the lack of hands-on skills required by the labour market, which universities and other educational institutions are often unable to provide.
The key sectors for placement of the graduate volunteers include agriculture, finance and banking, tourism and hospitality, information, communication and technology, infrastructure, energy and minerals, health, education and social development.
Beneficiaries get the opportunity to develop their ideas into solid business proposals, hone their entrepreneurship skills and access finance to start or improve their businesses.
Volunteers are also provided with a package that includes coaching, mentorship and role models to guide them along their career path even after the programme.
The programme is run by the Ministry of Gender Labour and Social Development, with support from the United Nations Development Programme and the United Nations Volunteer (UNV).
The two-year pilot programme is expected to cost over $3.8m (sh13.7b), after which its success will be reviewed for further consideration.
According to Frank Mugabi, the gender ministry's communications officer, about 250 graduates are taking part in the first phase of the programme.
He said the ministry was encouraging employers to take part in the flagship programme for the benefit it has to their workspaces, the young graduates and the economy.
According to the guidelines, applicants must be Ugandan graduates between the age of 18 and 35.
The initial target was to have 500 graduates enrolled into the programme annually.
Applicants must have left school not more than four years. Bachelors degree holders have 60% of the slots, followed by diploma or vocational graduates (30%), and masters (10%).
An equal of male and female beneficiaries is required with 10% ring-fenced for graduates with disabilities, among other terms.
As part of their performance targets, all graduate volunteers are required to engage in community service once a week, working closely with community development officers.
The placements close with a graduation ceremony bringing together graduate volunteers and employers to review achievements.