The Interior Ministry's plans call for bounties of as much as $2.6 million for several of top leaders in the Kurdistan Workers' Party, known by its Kurdish-language initials PKK.
A seven-member council would monitor the program in the Turkish Interior Ministry. It would target acting PKK leader Murat Karayilan and as many as 50 other top PKK figures, Turkish daily newspaper Today's Zaman reports.
Turkish media this week reported that members of the PKK are suspected of kidnapping relatives of the president of the semiautonomous Kurdish government of Iraq, Massoud Barzani.
In January, Mahmut Sakar, lawyer for jailed PKK leader Abdullah Ocalan, told German news magazine Der Spiegel frustration with the Kurdish situation in Turkey is growing.
"People are frustrated and angry," he said. "Day by day the chances of resolving this conflict are waning."
A move to settle simmering issues with the Kurdish minority was upended in 2009 when a court banned the pro-Kurdish Democratic Society Party from politics because of alleged ties to the PKK.