The product, as yet unnamed, will be positioned at the premium end of the coffee market and forms part of an internal global Nestle strategy, run under the theme of sustainability.
A source involved in the early stages of the project described the product as akin to the Cafedirect Fairtrade brand.
A 2002 report from Oxfam, entitled 'Mugged: Poverty in your Coffee Cup', condemned Nestle as one of the big four coffee companies exploiting growers.
A Nestle spokeswoman said the company was always 'looking at ways to innovate and re-energise products', but declined to comment on specific launches.
It is believed the initiative will launch in the UK first, prior to a global roll-out if the product is successful.
The coffee will highlight Nestle's funding of growers to enable them to diversify beyond a dependence on the coffee market. 'Nestle believes in a sustainable approach to coffee production and is committed to helping with the problems connected with low coffee prices,' said the spokeswoman.
Most famously, Nestle has been accused of encouraging mothers in the developing world to use its infant formula products instead of breast-feeding.
Nescafe's move to introduce a fair trade coffee is likely to prove unpopular with the Fairtrade lobby, who have accused it of unfairly dominating the market.
A number of major brands, including Green & Black's and Ben & Jerry's, have launched products with an ethical positioning.
Marketing Society column, page 33.
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