Nurses and specially trained youth workers are to be added to low-decile schools.
Prime Minister John Key says a $62 million positive behaviour school programme will be rolled out across all secondary schools.
Nurses and youth workers will be placed in the low-decile schools to help identify students with mental health problems and get them appropriate care.
In return, Mr Key says schools will be asked to take more responsibility for the well-being of their students.
He says the Education Review Office will start measuring how schools are doing with student well- being and he says the Government expects to see improvements in areas like bullying.
The package also aims to modernise the way the Government reaches mentally ill young people particularly through the increased use of social media.
However, the Labour Party says the Government's initiative does not address the real problem.
Labour's associate health spokesperson Iain Lees-Galloway says the glaring omission from the announcement is any effort to prevent youth mental illness.
He says one of the key drivers of mental illness in children is growing up in poverty, and if the prime minister was serious about addressing the problems, that is where he would start.
Head of the Secondary Principals Association says schools cannot be solely responsible for the mental health of young people.
But Patrick Walsh says other sections of society need to take responsibility as well.
He says most often mental health problems stem from what happens outside school, and parents also need tools to help their children cope.