The money will also extend the Ongoing Resource Scheme (ORS) to another 500 students - paying for specialists such as speech-language therapists and occupational therapists.
"In the case of students with special needs, a strong education increases the chance of them becoming more independent and better able to participate in and contribute to the community," Education Minister Hekia Parata said.
Nearly as much - $53.3 million in additional spending over four years - is being spent on the troubled school pay-roll system Novopay.
The Government was forced to take on management of Novopay from Australian company Talent2. In February, Secretary of Education Peter Hughes estimated fixing the system had cost an additional $45 million to date.
Ms Parata said the extra Novopay funding was to "complete the process of delivering an efficient and cost effective payroll system", and payroll performance continues to improve.
Live coverage and analysis of Budget 2015 from 2pm on iHeart Radio
EARLY CHILDHOOD AND NEW SCHOOLS
Early childhood education receives a $75 million boost over the next four years, which Ms Parata said would get more children attending from an early age and for more hours.
The Government is working towards a goal to have 98 per cent of all children starting school next year having previously participated in quality early childhood education.School's operational grants - which greatly affect resources and day-to-day operations - will increase by one per cent, at a cost of $42.3 million.Inflation for the year to March was 0.1 per cent.
As previously announced, the Budget also includes new capital expenditure of $244 million to build seven new schools and kura kaupapa, expand four existing schools and build another 241 classrooms at existing schools.
Today's announcement of new education investment of $687 million over four years is partly funded by savings within the Ministry of Education of $65 million.Total spending on early childhood, primary and secondary education in the year is now $10.8 billion, a rise of about 4.5 per cent.
TERTIARY
As part of the Government's child hardship Budget initiative, the student allowance rate for tertiary students with children will increase by $25 a week. This is expected to benefit about 9000 families.Childcare assistance for low-income families will increase from $4 an hour to $5 an hour, affecting about 40,000 families.
Fewer people wanting to go to university or other tertiary institutions - driven by a decline in the population aged 18-25 and a stronger economy - has freed up money that will be invested in other areas.
Tertiary Education, Skills and Employment Minister Steven Joyce said much of that funding would continue the Government's push to get more people studying the "Stem" subjects - science, technology, engineering and mathematics.
More than $97 million over four years will be given to institutions to increase their intakes in science, agriculture, optometry, pharmacy and physiotherapy.
Currently institutions are allowed to put up student fees by a maximum of four per cent each year - which all universities have in recent years.
Mr Joyce said next year the annual maximum fee movement would come down to 3 per cent, and be subject to public consultation in June.
Total spending on tertiary sector will increase by 1.4 per cent in 2015/16 to $3.06 billion.
Live coverage and analysis of Budget 2015 from 2pm on iHeart Radio
