The country's best teachers will be offered bonus pay under a budget plan announced by Prime Minister Julia Gillard.

"The forthcoming budget will deliver on our promise to invest in rewarding great teachers around the country," Ms Gillard told reporters at a Canberra primary school on Monday.

"We will design a system where teachers who are performing well can get additional pay and additional reward to recognise that great performance."

The bonus pay will cost the commonwealth $425 million over the next four years and a total of $1.3 billion to 2018, the government says.

The first bonuses will be based on the 2013 school year and be paid in early 2014.