Colleges in England receive at least 13% less per student on average than school sixth forms to cover similar courses of learning, a report has said.
Sixth form college students get on average £400 less
The report, by the Learning and Skills Development Agency, estimated the total disparity at £200m.
Colleges said it was official endorsement of a "scandalous gap" they had long complained about - and one which had widened in recent years.
Ministers acknowledge the gap but say narrowing it "will not be easy".
The report said significant increases to further education funding since 2002-03 meant the difference in rates of funding between colleges and schools with sixth forms had narrowed and was now a relatively small part of the gap (2.09%).
Five other elements contributed: special pension contributions, growth in pupil numbers, drop-outs, and support for very large programmes and for disadvantaged learners.
It said three things commonly thought to contribute to the funding gap did not in fact do so: money for students' achievements, and two technical issues known as area cost adjustments and non age-weighted pupil unit deductions.
The report said one of the most contentious areas of the funding systems was the notion of "retention" - whether students completed their courses.
Differences in the way this is calculated between schools and colleges accounted for 3.6% of the gap.
The report also said that, for various reasons, colleges' costs were lower than schools', though this was a complex thing to calculate.
It was commissioned by the Learning and Skills Council, the body through which funding for all post-16 learning outside universities is delivered.
It said it would be discussing the findings with the Department for Education and Skills over the summer.
The minister responsible for the sector, Bill Rammell, said the government acknowledged that, despite significant investment in further education and a narrowing of the difference between funding rates, there remained a gap between school sixth forms and colleges.
"We must be clear that continuing progress on narrowing the gap will not be easy and will depend on the resources available," he said.
But ministers would "explore the scope for addressing the technical anomalies" and announce their decisions in the autumn.
A joint statement from the Association of Colleges, National Union of Students and Secondary Heads Association said the education of most young people aged 16 to 19 was being "short-changed".
The college association's chief executive, John Brennan, said: "It is indefensible that the two-thirds of young learners who study in colleges are being short-changed by at least £400 a year on average.
"It is time now to remedy this long-standing injustice."
The government had previously ackowledged a funding gap of 10.5%.
Liberal Democrat education spokesman Ed Davey said ministers should "hang their heads in shame".
"Years of Labour promising to tackle this discrimination against two thirds of 16 to 19-year-olds have actually seen things get worse," he said.
His party had promised to close the gap over the life of this parliament.
"As the college sector provides for more children from under-privileged backgrounds than school sixth forms, Labour is betraying its own commitment to social justice," he added.