As many as 200,000 people across Germany could get a job via the new scheme, the Brandenburg Labour Ministry estimated. It is to present the idea - along with five other states - to the upper house of the German parliament on Friday, the Frankfurter Rundschau newspaper reported.
The state's Labour Minister Günter Baaske said the idea was to unify the many different subsidy programmes for the long-term unemployed.
"We want to finance work, not unemployment," he said. "We want to find a way to get the long-term unemployed back into work, instead of parking them in meaningless occupation measures."
The proposal would see companies receive the wage subsidy if they employ someone who "cannot be found regular employment in the foreseeable future," and who has been out of work for two years or more.
If necessary, the subsidy would run for up to five years. The workers would be paid according to union tariffs, and receive a "location-typical" wage. Baaske also said people would not be forced to take the job. "It must be on a voluntary basis," he said. "Only then can people be motivated."
But the minister also acknowledged the need to avoid one potential pitfall at all costs - companies sacking their workers to take on the state-subsidized unemployed.
The concern was voiced by labour market expert Karl Brenke of the German Institute for Economic Research (DIW). "Why should a removal firm take on someone the usual way if it gets a subsidy for taking someone who was long-term unemployed?" he asked.
Even the German employers' association BDA rejected the idea. "It feeds the illusion that there is a policy alternative to a job on the job market," a spokesman said.
The Brandenburg state government countered by pointing out that more than a million Germans had been registered unemployed for more than a year. "We can't abandon these people," he said.
Meanwhile, an employment agency in Dortmund has started offering cash bonuses for any unemployed people who take a job. Flyers in the "Job Center" promised "Every acceptance of work is rewarded with €200," the Bild newspaper reported on Friday.
The Federal Employment Agency criticized the scheme, saying it was "at the limit of what the law allows." Spokesman John-Philip Hammersen said people living on the unemployment benefit known as Hartz IV were legally obliged to take any offer of work.