Wage rates of rural school bus drivers will soon be consistent with those who drive for comparable public transport services.
The government is investing an additional $26 million over four years for the wage increase.
Minister of Education Chris Hipkins said the ministry can now ensure driver wages for funded services do not fall out of step with wage rates for comparable public transport services.
"While driver availability tends not to be such an issue for rural school buses, we want to ensure that remains the case by offering comparable rates in line with any major movements."
Hipkins said ministry officials and schools will work with operators to pass on the additional funding to drivers from the start of next year.
Operators have to opt in to receive the funding and must agree to pass it, and any subsequent increases, onto their drivers.
Last week, school bus drivers warned their pay was falling behind those at the wheels of urban public transport routes, potentially leading to shortages next year.
More than $60m was put towards increasing driver wages and improving working conditions in October.