The £980m fund, which will also be spent on expanding the size of top-performing schools, has been created in a bid to combat a squeeze on places in areas with the greatest pressure.
The initiative is expected to create around 50,000 more places, going some way to absorbing a massive rise in pupil numbers over the coming years. The first wave of cash will be spent in 2013-14, with the majority coming in the following year.
The Treasury added that £270m would be ploughed into further education colleges in England, in areas “where it will have the biggest on growth, and on colleges with the greatest needs”.
The spending will significantly boost education secretary Michael Gove’s flagship free school programme, which sets up new state-funded schools free from local authority control.
Under Gove, 192 free schools have been opened or approved.