Campaigners wanted a national code of conduct on school transport
Councils will be discouraged from using double-deck buses and allowing three pupils on a two-person seat to improve school transport safety in Wales.
Other measures will include asking local authorities to look at using CCTV cameras and escorts on school buses.
Deputy First Minister Ieuan Wyn Jones said he would also lobby for more powers from Westminster for Wales.
Pressure has been growing for better school transport regulation after a number of accidents.
These included the death of 12-year-old Stuart Cunningham-Jones in a crash in the Vale of Glamorgan 2002.
Stuart died when the double-decker bus he was travelling on careered off the road and hit a tree near the Vale of Glamorgan village of Ystradowen.
An inquest jury returned a verdict of accidental death after it was revealed that moments before the crash a group of children on the crowded and noisy bus had tried to grab the steering wheel.
The Learner Travel Measure has been drawn up under Wales' new lawmaking powers.
Under it, free transport will be extended to primary school children living two or more miles from a suitable school. At present the law is three miles from the age of eight.
Councils will be able to change school start and finish times to make the best transport arrangements.
Mr Jones said he aimed to have the main provisions in place for the start of the academic year in 2009.
He said: "In Wales we know from tragic results that poor behaviour whilst travelling to and from school is a real threat to safety.
"The new measure and guidance will be put in place under powers already available.
'Priority and safety'
"However, through extensive consultation I am aware of widespread concern regarding bus regulation and safety issues - which at present we cannot fully tackle because of constraints on assembly law-making power."
"I will therefore be making the strongest possible case to seek enhancement of the National Assembly's powers to take the steps needed to ensure maximum safety for our young people."
Stuart Cunningham-Jones's father, David, has said that "quite possibly a code of conduct could have saved Stuart's life".
Speaking before the announcement, he said: "The cost of all this is a relative thing. It is a matter of priority and the safety of our children first.
"After the crash in 2002 the pupils were telling us that adults were letting them down. We see this campaign as the first step of rectifying this."