The soft drink "Coca Colla" is being pushed by President Evo Morales, Bolivia's first indigenous leader known for chewing coca leaves at UN meetings, to boost the plant.
Intended to rival its more famous US cousin, Coca Cola, the fizzy drink is at the center of a plan coca growers from the Morales stronghold of Chapare in central Bolivia submitted to the government last week to boost coca production.
Farmers proposed the name Coca Colla in reference to people living in the Andean part of the country.
A Vice Ministry of Coca and Integral Development official who requested anonymity said the project would be launched in about four months and that the initiative could be either run by the state or a joint partnership with coca growers.
The official said the drink's packaging would feature a black swoosh and red label similar to the famous Coke insignia.
The fate of Coca Colla is of particular concern to La Paz, which wants to expand coca cultivation. Tea, flour, toothpaste and liquor are already being produced using a coca base.
Bolivia, the world's third largest producer after Colombia and Peru, yielded a coca crop of some 30,500 hectares (75,370 acres) in 2008, an increase of six percent over the previous year, according to the United Nations Office on Drugs and Crime.
Last year, Morales, who also heads the coca growers' union in the Chapare region, vowed to increase the expanse used to grow coca bushes by 20,000 hectares (49,420 acres) in the impoverished Andean country.
Bolivian law currently approves the use of up to 12,000 hectares (29,650 acres) to grow coca in the Yungas stretch of forest in the Andes Mountains for traditional uses such as tea, chewing and religious rituals by the Aymara ethnic group.
Coca leaves have been cultivated in the Andes mountains for 3,000 years and are part of the culture and identity of the people there, according to Morales, who has said some 10 million people in the Andes chew "sacred" coca leaves.
The International Narcotics Control Board has called for years for a ban on coca leaf chewing.
Bolivia's new constitution, drafted by the ruling Movement Toward Socialism (MAS) party, says coca is recognized as "cultural heritage, a natural and renewable resource of biodiversity in Bolivia and a factor of social cohesion" and notes that the coca leaf is not a narcotic in its natural state.
The Morales government threw out US Drug Enforcement Agency (DEA) agents in 2008, and the president said he would seek the help of other countries to combat drug trafficking.