Worthit! kidswear comprises 30 pieces and sits below Woolworths' Ladybird kidswear range. Prices start at 70p for a T-shirt.
Woolworths chief executive Trevor Bish-Jones told Drapers: "It's the cheapest kidswear brand on the market. I'm certain it's going to be a success."
The range, which targets kids aged one to 10, will be supported by a TV advertising campaign, which kicks off on April 10.
Woolworths will also launch a men's and women's accessories line includes scarves, gloves, socks, hats and flip-flops, ranging from £1 to £4.
Bish-Jones added that Ladybird had performed well last year, when the company's retail arm returned to profitability.
To read a breakdown of Woolworths' results click here.