The Government has pledged to make the UK's public sector the most environment-friendly purchaser in the EU within four years.
Environment Secretary Margaret Beckett announced that Carillion chairman Sir Neville Simms would head a task force to achieve the aim.
The public sector spends around £125 billion per year and the Government wants to channel this to create markets for sustainable products.
Prime Minister Tony Blair said: "By joining up thinking and action across all levels of Government, and by setting long-term objectives, the Government is dedicated to securing the future for all. I want to use this new strategy as a catalyst for action."
Beckett added: "Sustainable development is vital to building a decent future for everyone. The Government is leading by example but the strategy can't be delivered by the Government alone."
Meanwhile, London Remade revealed that firms in the capital spent more than £20 million on recycled products in the 12 months up to March 2004.
Of £21,232,000 spent by 80 companies signed up to the Mayor's Green Procurement Code, 45% went on building and construction materials.
London Remade market development manager Tina Perfrement said: "We strive to get across to individuals and organisations that there is no point in recycling unless you buy recycled products."