Grammar schools will get a £50 million boost from the Government to allow them to expand.
The controversial new plans will mean more places are available at selective state schools.
Ministers say the move will give parents more choice for children moving to secondary school aged 11.
But school leaders criticised the decision, saying they were "disappointed" the Government was spending "scarce funding" on expanding grammars.
To take on more pupils, grammars will have to submit plans setting out how they will boost the numbers of disadvantaged pupils they admit.
They will also have to show proof of a need for extra places in their areas.
If all 163 grammar schools in England were given an equal share of the £50m they would receive just over £300,000 each.
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As well as agreements with the individual schools, the Grammar School Heads' Association (GSHA), which represents the majority of selective state school leaders, will have to set out the types of action schools will need to take to expand.
If the schools do not meet the terms of their action plans there will be sanctions, it is understood.
Education Secretary Damian Hinds said hundreds of thousands of new school places have been created since 2010 but the Government wants to "make sure every family can access a good school".
He said: "By creating new schools where they are needed most and helping all great schools to grow, we can give parents greater choice in looking at schools that are right for their family – and give children of all backgrounds access to a world-class education."
Geoff Barton, general secretary of the Association of School and College Leaders, disagreed, saying the Government was spending "scarce funding".
"The evidence is clear that expanding the number of selective places is likely to be damaging to social mobility," he said.
"High-ability students do just as well in good non-selective schools as they do in good grammar schools, and funding is therefore better spent on creating places in the former rather than the latter.
"This is important at any time but particularly so when funding is very tight as a result of government under-investment in the education system."
GSHA chief executor Jim Skinner said: "We are very pleased that, like other good and outstanding schools, selective schools now have access to a fund to allow them to expand their premises.
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"This is particularly important at a time when there are increasing numbers of pupils reaching secondary age and such high demand from parents for selective school places."
Theresa May, who went to a grammar school, has always had an expansion in her sights, but the plans were dropped in the wake of last year's general election drop in support of the Tories.
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