From next year schools will no longer be labelled on a one to 10 decile system.
It's part of a nearly $3 billion dollar investment into the education sector.
For years how much money a school received from the Government depended on its decile number, now that's scrapped.
"Deciles as a labelling mechanism have been really damaging - that's all over from next year," Education Minister Chris Hipkins said.
The new system will be bought for $300 million. It's called an equity index and it's hoped to bring more fairness into the education system.
"The decile thing is based on 2013 census data and so decile has always been a blunt tool to work out the level of disadvantage in a community," Papatoetoe High School Principal Vaughan Couillault said.
Schools now won't be ranked and the way funding is calculated will change.
"The new equity funding index relies on a lot more information and it provides a much more accurate picture," Hipkins said.
"Unfortunately, some people are using deciles as an indication of a school's quality in fact some of our lower deciles schools are providing outstanding outcomes."
It's hoped it'll also stop the stigma around lower decile schools.
"Decile rating has been used as a proxy measure of performance and they're completely unrelated," Couillault said.
A further $777 million will be spent on capital investment.
Of that, $385 million will be spent on building and refurbishing 280 classrooms at more than 40 schools, $321 million will be spent on replacing furniture and equipment, $105 million on funding for Māori-medium Kura and $88 million on rebuilding Christchurch Schools.
Pay parity for early learning has also had a boost with $266 million over four years to keep teachers in the classroom.
"This is the biggest step towards pay parity that we have taken there will still need to be another step next year," Hipkins said.
