FREE transport is being provided in an experiment aimed at boosting staying-on rates.
Money will be provided from September in the Education Maintenance Allowance budget for 16-year-olds in households with less than pound;30,000 income a year.
The Department for Education and Employment will consider extending the programme to the rest of the country if it helps to reduce the post-16 drop-out rate.
The money, available in Lancashire, Sunderland, Suffolk, Lincolnshire and Worcestershire, can be used on public transport or to get access to free school buses.
In some areas there will be free transport for those who qualify. Other areas will offer discounted travel.
A similar two-year deal will be offered to next year's new students.
In Lancashire, it is expected to help rural communities. The county's education committee chair Hazel Harding said: "The scheme has been introduced in the east of the county, which is where the worst of the problems are in terms of the cost of getting to college. It is an issue we have been concerned about for some time. Many of these people are under pressure from their parents to earn money when they leave school.
"There are a lots of families who earn below the pound;30,000. There are a lot of people on very low incomes and traditional industries have been decimated. This will make a big difference to us."
Th money was welcomed by Mike Austin, principal of Accrington and Rossendale College, with 2,000 full-time and 12,000 part-time students based on six sites.
"It's a very good offer. It's difficult to quantify at this stage, but this should make a big difference to post-16 take-up. We don't want anyone dropping out for transport reasons," he said.
The Local Government Association, which has been involved in talks with the DfEE about rural transport for students, says the scheme is a major breakthrough.
An LGA spokeswoman said: "This is something which we are delighted with because one of the barriers to further education is transport.
"Anything which can get people into colleges or school sixth-forms has got to be a welcome initiative."
Attendance and achievement bonuses are being offered on completion of courses in East Lancashire, Suffolk and Sunderland.
The initiative follows a recent report by the Joseph Rowntree Foundation, (see www.tesfefocus.co.uk) which warned that the cost of transport was contributing to post-16 exclusion.
The report said petrol prices and patchy transport were restricting access to further education among rural people.
Local authorities are not obliged to provide transport to colleges and have been known to cut down on provision - in some cases scrapping it entirely - to keep within budgets.