The assembly government is funding thousands of extra post-16 school and college places as part of a Pounds 25 million cash injection into education.
The new money, announced at an all-Wales economic summit this week, will help provide 2,500 places for young people and adults in sixth forms and FE institutions.
Cash has been brought forward from next year's capital budget following months of criticism after the government controversially slashed post-16 budgets by 7.4 per cent.
It comes as Powys this week revealed plans for a Pounds 600,000 rescue package to save its sixth forms.
The local authority also plans to draw up three-year financial plans with each of its schools. Last month, schools in the county warned that 30 teachers could lose their jobs because secondaries face a deficit of Pounds 800,000.
Heads and governors wrote joint letters to the Assembly government protesting at the cuts.
John Kendall, chair of governors at John Beddoes School in Presteigne, said if the plan went ahead his school would get about Pounds 100,000. "It will sort out most of our problems on a short-term basis, but what's needed is some long-term planning, not this last-minute, patch-up job," he said.
Teachers' unions warned that other local authorities in Wales would have to make tough decisions to resolve the funding crisis.
Gareth Jones, secretary of the heads' union ASCL Cymru, said: "All local authorities will have to look at their own post-16 provision over the next five to 10 years. In the absence of funding from the government, councils have the option of topping up the funding. But there needs to be longer-term planning."
Philip Dixon, of ATL Cymru teachers' union, said: "Councils must make sure they are offering the best systems educationally. I think it would be a disaster for them to plan their post-16 structure and provision based solely on what they are prepared to put into it financially."
Many see the post-16 funding cut as a covert way of scrapping sixth forms and moving towards a tertiary-style system in Wales.
Last month, controversial plans to close sixth forms at Rhyl High and Blessed Edward Jones RC High in Denbighshire were approved.