High-profile NHS hospitals such as Great Ormond Street, the Royal Marsden and Guy's and St Thomas' will soon be invited to open new profit-making branches abroad.
Officials from the Department of Health and UK Trade and Industry will launch the joint scheme this autumn, which will aim to build links between hospitals wishing to expand and foreign governments which want access to British health services.
According to reports in the Independent, upfront investment could only be drawn from income received from private patients and any profits made abroad would be channelled back to the UK.
The proposal was reportedly inspired by hospitals in America, including Baltimore's John Hopkins, opening similar branches abroad.
Health Minister Anne Milton said: "This is good news for NHS patients who will get better services at their local hospital as a result of the work the NHS is doing abroad and the extra investment that will generate.
"This is also good news for the economy, which will benefit from the extra jobs and revenue created by our highly successful life sciences industries as they trade more across the globe.
"The NHS has a world-class reputation, and this exciting development will make the most of that to deliver real benefits for both patients and taxpayers."
But the move has drawn criticism from some quarters.
Katherine Murphy, chief executive of the Patients Association, told the Independent: "The guiding principle of the NHS must be to ensure that outcomes and care for patients comes before profits.
"At a time of huge upheaval in the health service, when waiting times are rising and trusts are being asked to make £20 billion of efficiency savings, this is another concerning distraction. The priority of the Government, hospital trusts and clinicians should be NHS patients."