Researchers are preparing to contact all 6,400 families in the country affected by the condition.
Children who have a parent or sibling with type-1 diabetes will be invited for a blood test to see if they are at high risk of developing the disease.
Those at risk will be offered a drug called metformin to see if it can hold off diabetes.
Metformin is already used to treat diabetes, but it is not clear if it might prevent it from developing in the first place.
If successful, the study could challenge long-established thinking on what lies behind type-1 diabetes.
Type-1 diabetes develops when the body does not produce insulin. This is the hormone needed to control blood sugar levels.
Despite extensive research, there is no way of preventing the disease.
Most experts believe it is caused by a problem with the immune system - mistaking insulin-producing cells in the pancreas - called beta cells - as harmful, and attacking them.
This study, called the autoimmune diabetes Accelerator Prevention Trial (Adapt), tests an alternative theory developed by Prof Terence Wilkin, from the University of Exeter Medical School.
Rather than focusing on halting the immune system, Prof Wilkin says it could be better to work on protecting the beta cells.
He argues the key cause of damage is stress on the beta cells as they struggle to cope with demand for insulin.
Then, he says, in some people, the immune system kicks in, killing off more cells, accelerating the development of diabetes into childhood - what we know as type-1 diabetes.
He hopes metformin will relieve the stress on the beta cells, so they can continue to make insulin.
Prof Wilkin said: "It is possible that a modern environment accelerates the loss of beta cells by overworking and stressing them.
"As a consequence, this could be contributing to the rising incidence of type-1 diabetes, which is appearing in ever younger age groups.
"Adapt will use a medication to protect the beta cells from the stress, so that they survive longer."
The researchers say if it is successful, the trial will offer a cost-effective way of preventing type-1 diabetes that could be made available immediately to children at risk.
The trial has initial funding from the type-1 diabetes charity JDRF.
Scotland has the third highest rate of type-1 diabetes in the world, and a good system of record to identify affected families.
The study will start recruitment in Tayside and will then extend across Scotland before crossing into England.
There are two main types of diabetes:
Type-1 diabetes can develop at any age, but usually appears before the age of 40, particularly in childhood.
About 10% of all diabetes is type-1, but it is the most common type of childhood diabetes, so it is sometimes called juvenile or early onset diabetes
In type-2 diabetes, the body either fails to produce enough insulin to function properly, or the body's cells do not react to insulin. About 90% of adults with diabetes have type-2, and it tends to develop later in life than type-1.
Source: NHS Choices
A major trial is set to start in Scotland aimed at preventing type-1 diabetes in children.