Wall Street was set for a sharply higher open on Monday after the U.S. government released details of a plan to clean up toxic assets from banks' balance sheets, a crucial component of efforts to stabilize the recession-hit economy.

Bank shares rose in electronic trade following news of the highly anticipated plan. Among gainers, Citigroup jumped 20.2 percent to $3.15 and Bank of America rose 17.1 percent to $7.25.

The Treasury committed $75 billion to $100 billion of the financial bailout fund to launch a new program to mop up banks' distressed assets.

In its formal announcement, Treasury said the three-part program will provide financing through the Federal Reserve and the Federal Deposit Insurance Corp to aid public-private investment partnerships buy up to $1 trillion in distressed loans and securities.

The positive is that it relieves an anchor around the necks of investors concerned about the viability of these institutions and adds yet another layer of security to hopefully gain investor confidence, said Andre Bakhos, president of Princeton Financial Group in Princeton, New Jersey.

However, he noted that investors are concerned about the unintended consequences that could emerge from the government's aggressive moves to pull the economy out of recession.

Still, stocks looked set to rise close 3 percent, extending a recent rally off of 12-year lows that was spurred by a series of efforts to shore up the economy, as well as positive comments from some major banks.

S&P 500 futures rose 18.70 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 182 points, and Nasdaq 100 futures added 23.00 points.

Treasury Secretary Timothy Geithner is expected to give details on the plan, while data on existing home sales is also on tap.

Energy shares could get a lift after Canada's No. 2 oil company Suncor Energy agreed to buy rival Petro-Canada
for about $14.86 billion. Exxon Mobil was up 1.2 percent at $66.91 before the opening bell.

Upscale jeweler Tiffany & Co gained 4.1 percent to $21.06 after reporting quarterly profit that beat expectations. But Tiffany gave a disappointing earnings forecast for the year, saying it has not seen signs of a turnaround.

Also on the earnings front, shares of Walgreen Co rose 5.2 percent to $25.55 after the company reported second quarter results.

Stocks fell on Friday as the Federal Reserve's plan to rekindle consumer and small business lending fell short of expectations and General Electric was hit by analysts' bearish comments.

Even so, the S&P 500 finished its best two-week run since 1974 as markets extended last week's bounce off of 12-year lows. For the year, however, the broad index remains down 15 percent.

(Editing by Chizu Nomiyama)