This will allow schools to pay for extra coaching sessions to improve the quality of sports and PE provision.
Prime Minister David Cameron said: “We can create a culture in our schools that encourages all children to be active and enjoy sport.”
He added: “The Olympic and Paralympic Games marked an incredible year for this country and I will always be proud that we showed the world what Britain can do.
“I want to ensure the Games count for the future too and that means capitalising on the inspiration young people took from what they saw during those summer months.”
The Government says the new scheme will involve:
* Lump sums for schools – a typical primary school with 250 primary-aged pupils would receive £9,250 per year, the equivalent of around two days a week of a primary teacher or a coach’s time
* A greater role for sporting and voluntary organisations, including sport’s National Governing Bodies (NGBs), who will increase the specialist coaching and skills development on offer for primary schools
* Tougher assessment of sport provision by Ofsted inspectors to ensure the funding is bringing the maximum benefit for all pupils, with schools held to account for how they spend the money
* Sport England investing £1.5m a year of lottery funding through the County Sport partnerships to help schools link up with local sports coaches, clubs and sports governing bodies
* More primary teachers with a particular specialism in PE via a new teacher training scheme.
The long-awaited policy is the result of months of talks in Whitehall, and comes after widespread calls for more investment in school sport to help build on the legacy potential of the 2012 Games.
Despite record investment in elite and community sport in the last six months, the government has been criticised for making cuts in schools sports.