Culture Secretary John Whittingdale said: "The Battle of Jutland was the biggest and most brutal naval battle of the First World War, claiming the lives of thousands of men.
"For Jutland's 100th anniversary next year, we want to commemorate the heroism and sacrifice of all who served.
"I am sure that their relatives, along with others from across the country, will want to attend these events in Orkney.
"It is a chance to pay tribute to the extraordinary bravery of so many of our countrymen."
David Evennett, MP for Bexleyheath and Crayford, said: "My own grandfather fought in the Battle of Jutland.
"It is only right that there will be the opportunity for others, like me, across the country, to remember their relatives who fought so bravely at sea during the First World War."
The Battle of Jutland was the most significant naval engagement of the war, fought in the North Sea between May 31 and June 1 1916 near the coast of Denmark's Jutland Peninsula.
It involved around 250 British and German ships and 100,000 sailors, of whom more than 6,000 from the Royal Navy and 2,500 from the German fleet lost their lives.
Elsewhere, events marking the battle's centenary will include a wreath-laying ceremony at sea on Jutland Bank by British and German ships, the laying of commemorative paving stones in honour of the four Victoria Cross recipients from the Battle of Jutland and commemoration of casualties buried in Sweden, Norway and Denmark.
HMS Caroline, the last survivor of the Battle of Jutland, will be opened as a museum in Belfast, and there will also be a series of commemorations at naval memorials around England and events in Germany.
Tickets to attend the events in Orkney are free but those attending will be responsible for their own travel and accommodation.
Applications are open to people whose ancestors served at sea during the Battle of Jutland or throughout the First World War, whether with the Royal Navy or other maritime organisations.