Schools in Northern Ireland will receive an additional £20.4 million sterling for the coming year, with the funding to benefit pupils at all levels.
The North's Minister of Education, Mr Martin McGuinness, announced the measures yesterday during a visit to St Eugene's in Derry, his old primary school.
"The extra money will be paid directly into school budgets, and school principals and governors will decide how it should be spent," he said.
The payments will be linked to enrolments and schools are set to receive an average of £56 per pupil with special schools set to receive £110 per pupil.
A supplement of £13 per pupil, or 5 per cent of the additional funding, will be incorporated into the policy of Targeting Social Need, and channelled to children who already receive free school meals.
"I believe the method of distribution is fair and consistent," said Mr McGuinness.
"The approach used this year gives pupils in all sectors the same funding and recognises the importance of investing in early learning."
He said £14.7 million of additional funding last year was put to good use.
The total budget for the Department of Education stands at £1332.5 million for 2001/02.
"It meant schools were able to employ more teachers and classroom assistants as well as purchase equipment and improve their premises," added Mr McGuinness.
Nursery and primary schools are guaranteed a minimum of £5,500 under the scheme, postprimary schools a minimum of £25,000 and special schools a minimum of £5,000.
The Ulster Unionist chairman of the Stormont education committee, Mr Danny Kennedy, said the money would be more fairly distributed than last year when the primary sector was under-funded.
"I am pleased that the representations made by the committee have resulted in a more satisfactory distribution of the additional funds," he said.
Meanwhile, Mr Tom McKee, of the teachers' union, NASUWT, said the most effective way of improving educational standards was to increase the number of permanent teaching posts.