The plan calls for building more subsidised housing and making it easier for banks to finance the purchase of homes.
It also enables banks to reach an agreement with house owners who have had a difficulty making their mortgage payments, allowing them to extend their repayment periods at no cost.
The Spanish government has also proposed an income-tax rebate for anyone filing out returns and has mandated to help all construction workers laid off from their jobs, due to a dramatic slowdown in the real estate and construction sector.
Pedro Solbes, the Spanish economy minister, said the plan constituted a first package of measures to "stimulate demand, support the real estate sector and the financing of small and medium-sized businesses."
Solbes plans of injecting $16bn cash into the Spanish economy had sparked off criticism from Miguel Angel Fernandez Ordonez, the governor of Spain's Central Bank, who felt such a plan could wipe out the country's budget-surplus, next year.
Solbes, however, said that the government's "fundamental objective" was to "maintain budgetary stability".
Jose Luis Rodriguez Zapatero, the Spanish prime minister, who was re-elected on March 9, had earlier promised to dip in to the country's budget surplus, in order to stimulate the economy.
Spain's economy grew 3.8 per cent last year, but most forecasts are that growth will be significantly lower in 2008.
Even the real estate sector, which has been the main factor of the growth of the Spanish economy for the past 10 years, has recently seen a slump.