Young people aged 16-21 would get a 66% discount on bus travel in England under Lib Dem plans outlined by Nick Clegg.
The scheme would be paid for by cutting the winter fuel allowance and free TV licences for better-off pensioners, the party's "pre-manifesto" proposes.
Mr Clegg told reporters: "We are telling you today that we are choosing to put the next generation front and centre of our plans."
The proposals are part of the Lib Dem pitch for next year's general election.
"The Young Person's Bus Pass will ensure that young people looking to access education or training can do so in an affordable way, and I hope that bus companies will top up that discount to something even more generous."
The deputy PM added: "Young people are required to stay in school until they are 18, but we haven't done enough to give them the support that they need to do that - literally to help them get from A to B."
He rejected reports that free bus travel for pensioners would be axed by the Lib Dems if they got into power "not least because these bus passes help keep the buses running, and because we know how much older people rely on public transport".
But he did confirm that the young people's bus passes would be paid for by removing the free TV licences and winter fuel allowance from pensioners paying higher rate tax.
"I know there are people who say you mustn't touch so-called universal pensioner benefits because politically it's too risky. We don't agree. What are effectively benefits for the rich and retired cannot be justified when there are so many young people struggling to get on their feet."
*Free bus passes are already being phased-out for pensioners aged between 60 and 68.
