Government funding for PE and sport in primary schools will be doubled to £320m (US$451.3m, €407.3m) as a result of a new levy being applied on sugary drinks.

From September 2017, primary schools will be able to access fund which will be increased from its current level of £160m (US$225.7m, €203.7m) per year.

In addition, 25 per cent of secondary schools across the country will be able to bid from an annual pot of £285m (US$402m, €362.8m) to opt into longer days and offer a wider range of activities to pupils, including sporting activities.

The move has been labelled “transformational” by Baroness Sue Campbell, who chairs the Youth Sport Trust, the charity which campaigns for children’s physical activity and quality school sport provision.

Money will be generated via the new levy, which announced by the chancellor George Osborne during his first Budget of 2016. From April 2018, soft drinks companies which produced products with sugar content above 5 grams per 100 millilitre will pay higher rates of tax. Osborne said the overall money raised is estimated to total £520m.

The fund will be held and distributed by the Department for Education (DfE), although it will be advised by the Department of Culture, Media and Sport about which programmes will be suitable for funding.

Secondary schools which commit to opening five hours longer per week will be able to bid for funding to pay for coaches and external organisations willing to put on sessions.

“This money will help primary schools get the support and investment they need to develop the physical literacy of young people so they become competent and confident movers as they progress through school – which we know can improve academic achievement,” added Campbell.

“We know that levels of PE and sport decrease as young people progress through secondary school, so this money will provide a new platform to further increase sporting opportunities and levels of physical activity in schools.”

Sports minister Tracey Crouch tweeted: “More money into school sport from a sugar tax will help get more children physically active and combat obesity. Very welcome across the sector.”

Emma Boggis, chief executive of the Sport and Recreation Alliance, said the initiative created an “opportunity for the education sector to engage with many of our members to ensure that the experience of young people are positive”.