Agriculture Secretary Mike Johanns planned to announce the aid Tuesday afternoon in South Dakota.
The drought aid includes:
The department would accelerate $700 million in planned payments to cotton, grain, sorghum and peanut farmers.
Two sources confirmed the details on condition of anonymity because Johanns had not yet announced it.
The administration has resisted a $4 billion drought-aid plan in Congress because it would go only to those who already get government subsidies, about four in 10 farmers. House leaders and President Bush have opposed the aid, but senators in June added the aid to a farm spending bill.
Drought has hit farmers in western Corn Belt states particularly hard.
Last month was the hottest July since the Dust Bowl in 1936. Dryness also approached records in many parts of the country, which saw the driest conditions from May through June since 1988.
The western two-thirds of Nebraska is in severe drought or worse, according to the National Drought Mitigation Center.