NSW has become the first of the states and territories to sign up to the federal government's education funding deal.

"This is a historic announcement," Prime Minister Julia Gillard, flanked by NSW Premier Barry O'Farrell, told reporters.

Federal Labor has given the states and territories until June 30 to agree to a two-for-one-dollar arrangement that delivers $14.5 billion in funding for schools.

NSW is the first of the states and territories to sign the deal.

"We're delighted to sign up to this arrangement," Mr O'Farrell said.

Ms Gillard said she was "very pleased" NSW was now on board.

"This will be remembered as the day our nation reached out to seize the opportunity of the biggest improvement agenda for our schools," she said.

Mr O'Farrell said the deal would deliver better outcomes for state schools.

Ms Gillard said she expected other states would follow.

"We will see more states and territories standing for improved schools and improved funding," she said.