The New South Wales Government will dip into its own pocket to help fund public schools, announcing a new $712 million "equity fund" to stop government schools becoming "second-class citizens".

Key points: The NSW Government had resisted signing Federal Government's new education model, labelling it unfair

NSW will now sign up to the deal after announcing a $712 million "equity fund" for public schools

The decision was slammed by the State Opposition, which accused the State Government of selling out public schools

The new fund, announced today, comes after it failed to convince the Federal Government to change its funding deal that will provide a big boost to Catholic and independent schools — a move the NSW Government has labelled as unfair.

NSW Education Minister Rob Stokes had previously refused to sign up to the new federal funding model, which will deliver Catholic and independent schools around the country $4.5 billion in extra funding.

The funding model will also provide a $1.2 billion "choice and affordability fund" to prop up Catholic and low-fee independent schools that may have lost out under the new model.

Today Mr Stokes and Premier Gladys Berejiklian announced NSW would sign up to the deal after deciding to put $712 million into a "NSW Equity Fund" for public schools.

"We were determined in this deal to ensure that public schools were not treated as second-class citizens," Mr Stokes said.

"Which is why we ensured, in terms of the federal funding for Catholic and non-government schools, that we were able to match that to ensure that no public school student is left behind.

Ms Berejiklian said the state had tried to argue its case for the Commonwealth to change to a fairer system.

"We put our case to the Federal Government," she said.

"And when the Federal Government decided it wanted to leave its fund as it was well we weren't happy with that, so that's why we've put those extra dollars for public schools," Ms Berejiklian said.

In late September the Federal Government threatened to withhold funding for public and non-government schools all together in early 2019 if the states refused to sign up by December 7.

In a letter to states, Federal Education Minister Dan Tehan sought assurances that state governments "would make up any shortfall experienced by the non-government sector to ensure that schools do not suffer undue financial stress".

The deal was slammed by NSW Opposition Leader Luke Foley, who accused the State Government of "selling out public schools in NSW".

"For all the huffing and puffing of Gladys Berejiklian and Rob Stokes over the last couple of months, they've capitulated and bent the knee to a Federal Government that's robbing our public schools of billions over the next decade," Mr Foley said.

Ms Berejiklian said over the deal's 10-year lifespan, the State Government would put an extra $6.4 billion into public schools.