Conservative plans for a radical overhaul of the country's schools within months were forced through in policy negotiations during the run-up to the formation of the coalition government.
The newly formed administration brings with it a new Department for Education that sees Michael Gove take up the position of Education Secretary.
The move opens the door for a raft of new schools to be set up by parent groups, charities and local businesses as well as existing school providers, a policy not backed by the Liberal Democrats before the election.
Legislation later this month will give all schools ranked outstanding by Ofsted the right to step out of local authority control immediately and become academies.
Mr Gove's post was one of the last appointments to the new Prime Minister's Cabinet to be announced as fierce negotiations on the reform programme continued between Mr Cameron and his deputy, Nick Clegg, until the last moment.
Mr Gove was prepared to stand down if it aided the formation of the coalition, but The TES understands that he was adamant that his policies should be retained - and Mr Cameron agreed.
A Conservative source said: "A lot of horse-trading was going on, but most of party's schools policies have been allowed through, even some of the more contentious ones. It took a long time to organise.
"Gove was said to be adamant that even if he went his policies should not go as well and Cameron was adamant that the policies should be upheld and so he backed him. It means that most of the radical stuff in the programme is now still on the table."
In a vaguely-worded document released on Wednesday, the details of the agreement between the two parties were revealed.
It shows that both the Conservatives and the Lib Dems will agree "to promote the reform of schools in order to ensure that new providers can enter the state school system in response to parental demand", a key principle to the party's "free school" movement.
In a small success for the Lib Dems, the two parties have agreed to fund a "significant" pupil premium from outside the schools budget.
During the election campaign, the Conservatives had suggested they would pay for a pupil premium by restructuring the entire schools budget, whereas the Lib Dems had pledged pound;2.5 billion for the policy to be paid for by scrapping tax credits for families from above average incomes.
John Dunford, general secretary of the Association of School and College Leaders, said: "I am pleased with Michael Gove at education and David Laws as Chief Secretary to the Treasury as they are the two cabinet members with the greatest knowledge of schools policy. Mr Laws will be giving the money that Mr Gove will be spending.
"In education you have to be an optimist. I hope Mr Gove will bring his natural optimism to the department and build on the excellent progress that has been made in the last 13 years. Election campaigns tend to emphasise the negatives, I hope he will now stress the positives.