Schools are set to receive an extra £1.3 billion over two years, education secretary Justine Greening has announced.
However, the increase is not "new" money and will be funded through "efficiencies" elsewhere in the education budget, including £280 million from the free-schools programme.
Ms Greening made the announcement in the House of Commons today, where she also confirmed that the national funding formula will go ahead as planned from 2018-19, although with a longer transition period.
The plans will provide for a "real-terms" protection to per pupil funding, she said.
They will see the budget increase from £41bn to £42.4bn in 2018-19 and £43.5bn in 2019-20.
Ms Greening said: "I'm confirming our plans to get on with introducing a national funding formula in 2018-19, and I can announce that this will additionally now be supported by significant extra investment into the core schools budget over the next two years.
"The additional funding I'm setting out today, together with the introduction of a national funding formula, will provide schools with the investment they need to offer a world-class education to every single child.
"There will, therefore, be an additional £1.3 billion for schools and high needs across 2018-19 and 2019-20, in addition to the schools budget set at spending review 2015."
She said the new money meant per-pupil funding will be maintained in real terms until 2019-20.
She told MPs this meant every school would see at least a 0.5 per cent increase in per-pupil funding, while underfunded schools would gain up to 3 per cent a year, with each secondary receiving at least £4,800 per pupil.
The education secretary told MPs that £420 million would be found from the main schools capital budget, the majority of which would come from healthy pupils capital funding.
Ms Greening said that while she "remains committed" to the free-schools programme and delivering the 140 new schools announced at the last Budget, she said working more efficiently to deliver the programme could save £280 million. This would include delivering 30 of these schools through the local authority route, rather than the free school route.
She said that across her department she would reprioritise £250 million in 2018-19 and £350 million in 2019-20, and she would redirect £200 million from the department's central programmes towards the core schools programme.
Labour’s shadow education secretary Angela Rayner said she “will always be the first to welcome new money for schools”, and thanked parents, teachers and school leaders for the work they had done in pushing the issue up the political agenda.
She noted that the new money has "all been funded without a penny of new money from the Treasury”.
She asked: “Does her decision to seek savings from the free-schools programme mean she finally agrees with those of us on this side of the House who believe that the programme has always been inefficient? The free school programme has always been more expensive than ministers hoped, so the idea that hundreds of millions of pounds can be now be saved seems to me like a bad joke.”
Ms Greening said the government would respond in full to the national funding formula consultation in September.
She said the PE and sports premium for primary schools would double.
The Conservative manifesto pledged that no schools would see their budgets cut as a result of the proposed national funding formula, and to increase the schools budget by £4 billion by 2022.
But an analysis by the respected Institute for Fiscal Studies found that this was only £1 billion of extra money over-and-above existing plans, and would equate to a real-terms cut in spending per pupil of 2.8 per cent between 2017-18 and 2021-22.
Earlier this month, it was reported that Ms Greening had demanded that the government publicly commit, before the summer holiday, to give schools an extra £1.2 billion.
Tes understands that Ms Greening had argued for the manifesto to include a guarantee that schools would not see a real-terms cut in per-pupil funding over the next five years, but was overruled.
School funding became a major issue in the general election, with teaching unions leading a campaign against projected real-terms cuts in per-pupil funding between now and 2022. An analysis by polling company Survation suggested that about 750,000 votes could have been swung by the issue.