CBBC, the channel for 7-12 year olds, said it would allow digitally literate children the access to characters and resources they had come to expect.
Users would be able to build an online presence, known as an avatar, then create and share content.
Bosses said CBBC World would not have the financial aspects of other online worlds such as Second Life.
A spokesman said: "This kind of cross-platform broadcasting is becoming the norm for people who have been born into the digital world.
"It will give children a chance to move around a safe, secure world where they can not only interact with familiar characters but have an opportunity to make that world a more fascinating place with their own imaginations."
Those building CBBC World said the emphasis would be on safety and responsibility, with no chatrooms or facilities for building new parts of the virtual world.
It is expected to go live in the summer with a full launch in the autumn to coincide with the CBBC relaunch.
BBC children's controller Richard Deverell said: "CBBC World is a good example of the way we need to go.
"The thing that interests me is that children are at the vanguard. And that is where we are taking Children's BBC."
(Source : BBC)
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