In a visit to the Top End on Wednesday, Prime Minister Anthony Albanese announced the government's commitment to fully fund each territory student to the Schooling Resource Standard - the minimum funding required to meet their educational needs.
The funding needed for a public school student in the NT is almost double the national average because of the territory's remote locations and large Aboriginal and Torres Strait Islander population.
Mr Albanese said schools in disadvantaged areas will be prioritised to lift enrolments across the territory.
"One in five NT children was being left behind, was being underfunded," he said.
"(We are) determined to address that."
The federal government acknowledged the NT's specific challenges, including "significant concentrations of disadvantage".
Under the new agreement, the Labor government will invest an additional $737.7 million in the next five years while the NT government will invest $350 million.
Commonwealth funding will jump from 20 per cent to 40 per cent of the standard, with the NT government committed to reaching 60 per cent by 2029.
NT Chief Minister Eva Lawler welcomed the agreement, saying the funding would also go towards personalised catch-up tutoring for children who are falling behind.
"Providing extra funding to territory schools means more than just being fair - it gives more resources to schools and teachers to help kids be better equipped to enter the workforce," she said.
NT Chief Minister Eva Lawler says the extra funding provides more resources to help kids. (Mick Tsikas/AAP PHOTOS)
Federal Education Minister Jason Clare said one in five children in the territory were not receiving funding.
"This agreement means the most underfunded schools in Australia will now be fully funded," he said.
"This agreement doubles the investment the Commonwealth makes in NT public schools."
The Australian Education Union said the funding was "well overdue".
"The bulk of the funding must be delivered well before 2029 because we know that teachers and students need resources now," union president Correna Haythorpe said.
NT branch president Michelle Ayres said there was an urgent need for extra resources in the classroom.
"(This) means extra support for students with complex needs and those at risk of falling behind, more teachers, counsellors, support staff and Aboriginal and Torres Strait Islander education workers," she said.
The investment follows a similar agreement struck with Western Australia and the ACT.
Mr Albanese was due to leave Darwin on Wednesday afternoon after a significant cash splash in the NT, including a landmark $4 billion housing package announced on Tuesday.
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