Three London councils - Westminster, Islington and Camden - have combined to set up the initiative, which will sit at the Inner London Family Proceedings Court.
The three-year pilot will cost more than £1.3m, with just under £900,000 coming from central government and the rest from the three boroughs.
The focus will very much be on therapy and recovery and so therefore on the longer-term interest of the child
Currently two-thirds of children taken into care in inner London have parents with drug or alcohol problems.
Justice minister Bridget Prentice said: "Cases will be brought to court earlier wherever a parent is suspected of substance or alcohol abuse.
"And during the course of the case, the focus will very much be on therapy and recovery and so therefore on the longer-term interest of the child."
She added: "If we can take a step towards ending the misery drugs and alcohol abuse causes families, that can only be a good thing."
The concept of the court is American and relies on swift and co-ordinated action from drug experts, social workers and housing professionals.
The judge could order parents to attend one-to-one counselling or group sessions to avoid having their kids taken into care.
Specialist district judge Nick Crichton, who has campaigned for such a court for the past five years, said: "We are confident that the pilot court will be able to make a significant difference to the lives of the children whose cases will come before us, and we are excited that at last the project is about to start."
He said the court would not focus solely on detoxifying the parent, but seek at the same time to understand the other problems that could be contributing to their situation.
These could include abusive relationships, debt, mental health problems, learning difficulties, and housing issues.
The court could recommend visits to the housing department, Alcoholics Anonymous sessions, and even advise ending abusive relationships.
"To some extent we might have to be uncomfortably directive," Judge Crichton said.
Parents' progress will be monitored by the same judge every two to four weeks - a point emphasised by Judge Crichton as key to the pilot's success.
In the US, the courts have a high success rate of keeping children with their parents after they have received help.
Westminster councillor Sarah Richardson said: "This new court process will give us the chance to intervene and support the family unit rather than take it apart, by helping parents through treatments and recovery.
"This, we hope, will keep both the child safe and the family together."
The project will be evaluated by experts from Brunel University to see if parents on its programme are more successful in tackling their substance abuse.
It will also monitor whether children of addict parents can safely remain at home, or if the scheme helps youngsters in care be returned to their parents.
Judith Harwin, professor of social work at Brunel University, said there were two problems with the existing policy of dealing with addictive parents.
In cases of illegal drug use, such as crack or heroin, authorities had "far too speedy a response" to remove the child before "parents have a chance to show whether they can address their problems".
In other cases, such as alcohol abuse, the case comes to court "far too late". The child can already be suffering from neglect and is more difficult to place with an alternative family.
"This means the child may drift in care for a long time", which could have poor outcomes for their future education, health and employment prospects, Professor Harwin said.