Schools in Northern Ireland are to get an extra £41m next year after Education Minister Angela Smith announced a budget increase of 4.3%.
An independent education spending review was announced last week
However, Ms Smith warned money was being spread too thinly because too many schools have empty places.
Three education and library boards will get more money, but funding from the two which overspent will be deducted.
The £10m from the Belfast and the South Eastern Boards will be redistributed among other areas of education.
The minister said the challenge of falling pupil numbers has to be addressed.
"This is a significant injection of extra funding into our schools, and will make a real difference to many but it could deliver so much more," she said.
"The fact is that this investment is spread too thinly across too many schools, many with significant surplus places."
Ms Smith said the independent review of education spending in the province announced last week by Northern Ireland Secretary Peter Hain would examine how best to use resources.
The minister acknowledged efforts made by the two overspending boards in reducing their deficits.
"The challenge must now be for the boards to prioritise to ensure a strong focus on key front-line services, including support for special educational needs; healthier school meals; and school maintenance," she said.
"I also want them to look at ways of working together on shared services in readiness for the new education authority."
Frank Bunting of the Irish National Teachers' Organisation said the union had a "high regard for Angela Smith".
"While there is much substance in the statement, there is also unfortunately spin," he said.
"The increased funding is not sufficient to prevent education and library boards making additional cuts to their services - this is bad news for pupils, parents and teachers."