Scientists from Glasgow Caledonian University will study the city's old tunnels to find reservoirs which can be pumped to create geothermal energy.
The first stage of the work will focus on the Clyde Gateway Regeneration area and will take three years to produce a blueprint of the entire city.
Geotechnical specialist Dr Nicholas Hytiris said once pools are found, ground source heat pumps could then be used to begin extracting heat from the water. This would then be used to heat homes.
He said: "We believe this technology will, in the long term, be able to provide cheaper and more sustainable heating, which could be an answer to fuel poverty issues prevalent in many areas of Glasgow, particularly those with a mining past and a legacy of poor-quality housing and high unemployment.
"After Hamburg and Stockholm, Glasgow could be the third city in the world to have under-street heating.
"In three years' time we will have a full and accurate record of what is going on beneath our feet and then we can go on from there."
The British Geological Survey (BGS) has offered full access to its data for the project, including a 3D model of the city.
The work will be done by PHD student Emma Church, part-funded by ScottishPower.
Derek Drummond, sustainable technology manager at ScottishPower, said: "This is an excellent project which could prove to be very beneficial for the city and its residents.
"The initial work around the Clyde Gateway regeneration area should allow a good understanding of the technical challenges involved in capturing this energy, and how it could be applied to other areas.
"It is important that we can fully understand how this energy will integrate with the electricity network."
Glenalmond Street, in the east end of Glasgow, has been using geothermal energy for 10 years, heating 17 homes at a cost of about £160 a year.