The Government says it will increase spending on alternative education for the first time in a decade.
Most of the 3000 teenagers who enrol in alternative education each year have been excluded from school or are persistent truants.
Education Minister Anne Tolley and associate minister Pita Sharples have announced an 8.4% increase for the sector, taking annual spending on alternative education to $19.5 million.
The ministers also announced on Wednesday that alternative education providers would now be required to involve a registered teacher.
The decisions provide certainty for alternative education providers. Last year, a critical review proposed dropping alternative education and returning students to schools.
However, Mrs Tolley renewed funding for the sector for a year while she considered options.