Residents affected by the bedroom tax are set to receive up to £900 in return for downsizing.
Bedroom tax protest organiser Amelia Roberts with other protesters outside the Council HouseWhitefriars and the city council will gift tenants £300 per spare bedroom in a bid to free up much-needed larger properties.
The cash will then be spent on removal costs or on decoration and flooring for their new homes.
Whitefriars has pinpointed 150 homes which could be freed up under the scheme. It comes after the government cut benefits to any housing association tenants with spare bedrooms.
Around 3,000 residents have been affected in Coventry alone.
It comes following fresh protests over claims the benefit cut would force people out of their homes.
Simon Brooke, head of income management at Whitefriars, said he believed the scheme would prove attractive to many residents.
"We realise there are a lot of people who remain living in the same home where they raised their family and the house is now too large for their needs.
"With the ever increasing costs of utility bills, it can also be very expensive to pay for gas and electricity to heat large homes.
"These homes are now needed for families in the city. If people want to down-size then this scheme gives them the help and support they need to make the move."
Coun Ed Ruane, cabinet member for housing at the city council, added: "We have a real shortage of family sized accommodation in the city, especially houses with five or more bedrooms.
"As a result there is great demand for family housing from people who have been waiting a long time or have some immediate priority need."
Campaigners repeated their calls for a non-eviction policy during a protest outside the offices of Whitefriars last week before a board meeting.
Organiser Amelia Roberts said no money had been set aside for a hardship fund to help residents even though that had been seen in other cities.
"People are depressed and feel like they have no way out.
"Tenants want to downsize but found there is an extreme lack of houses to downsize too.
"One woman got up in a meeting and said 'it’s not just a bedroom, it’s our home'."
