Hungary will provide free in-vitro fertilisation (IVF) treatment to couples at state-run clinics, Prime Minister Viktor Orban has announced.
He said fertility was of "strategic importance". Last month his government took over Hungary's fertility clinics.
Mr Orban, a right-wing nationalist, has long advocated a "procreation over immigration" approach to deal with demographic decline.
The country's population has been falling steadily for four decades.
Mr Orban described details of his fertility policy on Thursday, after bringing six fertility clinics under state control in December.
Free IVF treatment will be offered from 1 February, but it is not clear who exactly will be entitled to it.
Mr Orban also said the government was considering an income tax exemption for women who have three children or more. Starting this month, those with at least four children have been exempt.
"If we want Hungarian children instead of immigrants, and if the Hungarian economy can generate the necessary funding, then the only solution is to spend as much of the funds as possible on supporting families and raising children," the prime minister said.
Mr Orban - who has been prime minister since 2010 - has based his campaigns on opposition to immigration.
In September last year, he told an international summit on demography that while other European leaders believed immigration was the solution to falling population numbers, he rejected this.
The prime minister then echoed the far-right "great replacement" theory, which claims that white European populations are being gradually replaced by people of non-European descent.
"If Europe is not going to be populated by Europeans in the future, and we take this as given, then we are speaking about an exchange of populations, to replace the population of Europeans with others," Mr Orban told the conference at the time.
"There are political forces in Europe who want a replacement of population for ideological or other reasons."
'Focus on population'
With an estimated birth rate of 1.48 per woman, Hungary is just one of many Eastern European countries facing demographic decline - due to both low birth rates and the emigration of working-age people to other EU nations.
Some of these countries have implemented their own policies to encourage birth rates to increase. Poland, for example, pays parents 500 zloty (£100) a month per child under its 500+ policy.
Croatia, which assumed presidency of the EU last week, said last year that population growth in the EU would be "a key question" for them.
"Demography needs to be put in the focus of EU policies in order to preserve the development of all member states," Croatian minister Vesna Bedekovic told a European Economic and Social Committee conference in November.
"The birth rate currently stands at 1.59 on average... This is why Croatia has recognised demographic revitalisation as a key question for its further development."