The Amsterdam City Council budgeted $1.3 million to begin the punitive program early next year, officials said, explaining people who chronically harass others or engage in extreme forms of intimidation would be forced to live in what critics refer to as "scum villages" for at least six months.
The offenders would receive "minimal services" and also be under the watch of social workers, officials said.
The controversial plan seeks to remedy what Mayor Eberhard van der Laan of the Labor Party called an "upside-down" current system in which innocent families normally leave neighborhoods because of bullying or anti-social neighbors. The new program, by contrast, would get rid of the troublemakers, said van der Laan, a former housing and "spatial planning" minister who is working with the City Council to create the zero-tolerance program.
A City Hall team has already begun identifying the worst offenders, The Irish Times reported.
"It's an upside-down world and we want to change it so the people who cause the problems are moved," City Council spokeswoman Amster Tahira told the BBC.
The hope is the program will deter perennial bullies, Tahira said, denying it will create ghettos full of troublemakers, which she said would create a "hotbed for more trouble."
The new rules will be enforced only in extreme cases, such as for violence against gay people or intimidating police witnesses, officials said.
The project will include a hotline where residents can identify alleged threatening or intimidating neighbors, German weekly news magazine Der Spiegel reported.
The city, which is seeking to shed its image as a center of prostitution and drugs, is searching for a permanent location on the outskirts for multiple containerized living units to house the offenders.
Critics point to the plan's similarity to a proposal last year by right-wing populist politician Geert Wilders to set up what he called "tuigdorpen," or "scum villages," for repeat troublemakers.
"Put all the trash together and leave normal people alone," Der Spiegel quoted Wilders as saying at the time. Wilders, who founded the Netherlands' Party for Freedom, is fiercely anti-immigrant and anti-Islam.
But Van der Laan spokesman Bartho Boer rejected the comparison to Wilders' proposal.
"This is supposed to be a deterrent," he told Der Spiegel. "It has to work."