Public sector bodies such as councils and NHS trusts will be encouraged to buy British steel in an effort to help save the industry.
The Government said all public sector organisations procuring steel will be required to consider the social and economic impact on the UK before buying from abroad.
The move came as a possible buyer emerged for the Port Talbot steelworks in South Wales, where thousands of jobs are at stake.
After a week in which the Government has struggled to formulate a response to the decision by Tata Steel to sell off its loss-making UK assets - including its plant in hartlepool, which employs 500 people - ministers said they are taking steps to create a "level playing field" for British manufacturers.
Guidelines introduced last year requiring central government bodies to take into account the "true value" of British steel are to be extended across the public sector - including the NHS and local councils.
Under the guidelines, public procurements which involve the supply of steel will need to consider "responsible sourcing, the training suppliers give to their workforce, carbon footprint, protecting the health and safety of staff and the social integration of disadvantaged workers".
Contractors working for the public sector will also be required to advertise their requirements for steel so that UK firms can compete for the business.
Cabinet Office Minister Matt Hancock said: "Last year we changed the rules across all central government procurement to ensure buyers take into account the true value of British steel - including local impact and jobs.
"The industry is responding positively to this so I want to go further. Now we will apply this guidance across the public sector so that, from operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money.
"When public bodies buy steel they must taking account of the true value of buying British."
Business Secretary Sajid Javid added: "I am determined to make sure we do all we can to secure a sustainable future for UK steel and find a viable solution that supports the workers and wider community.
"By changing the procurement rules on these major infrastructure projects, we are backing the future of UK steel - opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies."
The announcement comes amid heavy criticism of ministers for failing to take more effective action to prevent the "dumping" of cheap Chinese steel, seen as one of the key reasons for the problems in the UK steel industry.
For Labour, shadow business secretary Angela Eagle said that while the announcement was welcome, ministers had to do more if they were to ensure the survival of the steel industry in the UK.
"The Government has been dragged kicking and screaming to take action to support thesteel industry, which is a vital foundation industry and has descended further into crisis on their watch," she said.
"It is welcome that action is finally being taken by the Government on procurement and Labour has argued that shovel-ready infrastructure projects should be prioritised and British steel used whenever possible.
"As is so typical of this Tory Government, there is a yawning gap between rhetoric and reality, and they've presided over a failure when it comes to using British steel in public projects."
Roy Rickhuss, general secretary of the Community trade union, said the announcement was "a small step in the right direction" but did not address the need for immediate action to secure the future of the Tata plant at Port Talbot and other UK steelworks.
"Frankly, steelworkers will be shocked to discover that these measures were not already in place. These are bread-and-butter policies that should have been providing opportunities to UK steel producers already," he said.