Turnbull has also commissioned the original author of landmark 2011 report, businessman David Gonski, to write a new report on how to ensure the extra money delivers better quality education.

“This reform will finally deliver on David Gonski’s vision,” Turnbull said in Sydney on Tuesday, at a media conference with Gonski.

The Gonski name has become synonymous with needs-based funding for schools, which has been accepted as the best model by Labor and key education advocates.

Total federal funding for private and public schools will rise from $17.5 billion this year to $22.1 billion by 2021 and $30.6 billion by 2027.

This would mean real growth in funding above inflation and student number growth over a decade and an end to 27 separate school funding deals across the states and territories.

“I’m very pleased to hear that the Turnbull government has accepted the fundamental recommendations of our 2011 report,” Gonski said.

“I’m very pleased there is substantial, additional money even over indexation and in the foreseeable future.”

Education Minister Simon Birmingham said it would be a “true, needs-based, sector-blind funding model”.

The new Gonski report would ensure the money is used effectively and efficiently after Australian schools had witnessed a stagnation in terms of international performance, the minister said.

Legislation will be needed to lock in the 10 year funding path.

THE GONSKI 2.0 PLAN FOR SCHOOLS FUNDING

* Federal funding will grow from $17.5 billion in 2017 to $22.1 billion by 2021, and $30.6 billion by 2027.

* Ends 27 different school funding agreements the coalition inherited from Labor in 2013.

* Replaces them with a single, national needs-based, sector-blind funding model that will deliver across government and non-government schools.

* Additional support for students from low socio-economic backgrounds, those with a disability, who come from non-English-speaking backgrounds, smaller rural and regional remote schools.

* Transition to pay 80 per cent of the Gonski-based schooling resource standard for non-government schools – up from around 77 per cent now.

* Federal contribution to government schools will increase from 17 per cent now to 20 per cent of the schooling resource standard by 2020.

* A small number of schools – about two dozen – will experience “some negative” growth in their funding.

* Businessman David Gonski, who led the 2011 review, has agreed to lead a new review and provide high-level advice to the government.

WHAT THEY SAID ABOUT IT

“It will deliver real needs-based funding for children from all backgrounds in every town and every city and every region and every state, in every classroom of our great nation.” – Prime Minister Malcolm Turnbull.

“This is a momentous day for school leaders around Australia, for hard working principals and teachers … for parents, families, schoolchildren.” – Education Minister Simon Birmingham.

“I believe that we can do good things with the additional money, and I’m very pleased that there is substantial additional money, even over indexation and in the foreseeable future.” – David Gonski.

“Australians will never trust the Liberals when it comes to properly funding schools. When they think they can get away with it, they’ll cut.” – Opposition Leader Bill Shorten.

– AAP