Schools in England are being promised an extra £1.3bn per year alongside a shake-up of how funding is allocated to individual schools.
Education Secretary Justine Greening said she recognised that there had been public concern over levels of school funding during the general election.
The funding will come from savings, including spending on free schools.
Labour’s Angela Rayner said there “wasn’t a penny of new money from the Treasury”.
“They are not committing any new money and have not been clear about exactly what programmes they will be cutting to plug the funding back hole,” said Ms Rayner.
“The government finally appears to be listening,” said Jules White, a West Sussex head teacher who co-ordinated a campaign over funding shortages.
But he cautioned that any increase would need to keep up with “rising pupil numbers and inflationary costs”.
Geoff Barton, leader of the ASCL head teachers’ union, said this was a “step in the right direction and an acknowledgment of the huge level of concern around the country on this issue”.
But he said schools would still have to see the implications of the money being “saved from elsewhere in education budget”.
School funding became a major issue during the general election, with school leaders and teachers’ unions warning that budget shortages would mean cuts to staffing and subjects.
They pointed to evidence from the National Audit Office and the Institute for Fiscal Studies, which warned of £3bn funding gap and schools facing an 8% real-terms budget cut.
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As well as concerns about the overall amount of money available, there has been controversy over how it is divided between individual schools.
Ms Greening said that it would address unfair and inconsistent levels of funding.
For many years there have been complaints that schools in different parts of the country were receiving different levels of per pupil funding.
The Department for Education had said that schools in Barnsley received half the funding of schools with similar challenges in Hackney in east London.
But there was still discontent from some MPs, reflecting concerns from schools who seemed set to lose out and from others who thought they were still not seeing a significant improvement.
Details of an updated formula, with a higher minimum per pupil, will show budgets for individual schools in the autumn.
The overall core schools budget, said Ms Greening, will rise from £41bn in 2017-18 to £43.5bn in 2019-20.
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