The governments of Australia and New Zealand will provide nearly 400 million New Zealand dollars of new money towards improving education in the Pacific.
The two Prime Ministers, Julia Gillard and John Key, made the announcement at the Pacific Islands Forum being held in Auckland this week.
Mr Key says at present almost a million school aged children in the region are not attending school.
He says both governments recognise the importance of education, and there are specific targets for the funding.
"Of getting over 500,000 more children in the Pacific into education by 2021, ensuring that 75 percent of children can read by the age of 10."
John Key says New Zealand will provide 145 million dollars for the education initiative, and 122 -million for three regional scholarships.
Australia will provide nearly 125 million-dollars.