China is to abolish tuition and other fees for 150 million rural students, in a bid to narrow the gap between wealthy coastal provinces and poorer regions.
There are worries about school standards in poorer regions
The students will be exempt from tuition fees over the course of their compulsory nine-year education.
The move would cost 15bn yuan ($1.9bn) a year, the China Daily said, or about 140 yuan ($18) a child.
But children of rural families who have migrated to China's booming cities will not be included.
The new policy is "part of a major move to relieve the financial burden of farmers and to develop a new countryside," the state-owned newspaper said.
In the first phase of the programme, which took effect this spring, more than 50m students living in western provinces - some of China's poorest - were exempted.
In theory, Chinese children are offered education that is free or almost free from age six to 15.
But in practise, cash strapped local authorities and schools charge extra fees and education taxes.
Poorer families - and the average income of China's rural residents was 2,936 yuan (US$367) in 2004, according to the National Bureau of Statistics - can find these prohibitive.
The move to end fees follows increasing concern at a growing gap between the rich coastal provinces and poor interior, and at unrest in the countryside.
The authorities have promised more money and fresh policies to ease the problems, as part of what is officially billed as building a "harmonious society".
But many people in rural areas are still living on less than a dollar a day, and rural schooling is seen to lag well behind.
Rural unrest, often blamed on illegal land grabs, is also a growing problem.
There are thought to be thousands of protests a year across China, with farmers in villages whose land has been taken often directing their anger at corrupt local officials who skim off the profits when it is sold to developers.