Merlino caves in

State schools will receive an extra $7 billion from the Andrews government over five years after Victoria grudgingly signed up to the Gonski 2.0 funding deal.

Signalling the end of a bitter and protracted dispute, Victorian Education Minister James Merlino has finally inked a school funding agreement with the Commonwealth.

Under the plan, the federal government will inject $31.2 billion into Victorian state schools between 2018 to 2029, $30.1 billion into the Catholic sector and $18.7 billion into the independent sector.

Mr Merlino wrote to Mr Tehan on Saturday to inform him that he had signed the agreement.

“I am proud that through this bilateral agreement, the Andrews Labor government will commit to significantly increase our funding share for all schools, to ensure every Victorian school student has the best chance to thrive and succeed,” he wrote.

But Mr Merlino said he would continue to fight for a fairer model so "all students are supported to achieve their best, no matter where they go to school".

Negotiations have dragged on for more than three years, with the federal government’s contribution towards state schools' schooling resource standard seen as a key sticking point.

While independent and Catholic schools will reach 100 per cent of this benchmark, state schools will only reach 95 per cent. The Victorian government has been unsuccessfully urging the federal government to increase its share for state schools from 20 to 25 per cent.

It suspended negotiations with the Morrison government earlier this year, hoping Labor would win the federal election and pump more funding into state schools.

Australian Education Union Victorian branch president Meredith Peace said while it wasn't the agreement she had been hoping for, it would provide schools with certainty.

"We welcome the additional funding which has been provided to government schools," she said.

"Our state school kids are the lowest funded in the country, even though the Andrews government has invested heavily in schools and is closing that gap."

She said the additional funding would let schools employ more teachers and support staff, reduce class sizes and provide students with access to psychologists and speech therapists.

"It allows schools to meet the individual needs of students and that is something they struggle to do on a daily basis," she said.