John O'Dowd told the Assembly that 18 schools, including five special schools, will benefit from the £173m boost.

Capital spending was frozen in August 2010, leaving many schools waiting for years for urgent rebuilding or refurbishment.

Under the scheme, 17 schools will be rebuilt, with Foyle College in Londonderry and Castletower in Ballymena receiving the biggest portions of the cash.

In total, three special schools have been allocated more than £35m to advance new building projects.

"No-one visiting our special schools could remain unmoved by the needs of the children attending these facilities. I would dearly like to be able to advance every deserving case immediately," said Minister O'Dowd.

"However, within the limits of the funding available to me, I am determined that we make progress with a number of cases at this time."

The former Balmoral High School facility in Belfast will be used by St Gerard's Resource Centre on a long-term basis.

"Furthermore, Arvalee Special School in Omagh will be taken forward as part of the Lisanelly Campus project," the Minister added.

"The intention is that the new build projects will potentially be on site in the final quarter of the current financial year or early in the 2013-14 financial year.

"I want to be clear that approval of these projects is subject to each complying with any terms and conditions set down by my Department and securing the necessary approvals and clearances needed," explained the Minister.

Mr O'Dowd said lack of cash meant he could not consider a new build for every school under consideration.

"I also made it clear that we have too many schools for the population we serve and that steps need to be taken to reshape the estate to better meet the needs of our society," he added.

However, under a new Schools Enhancement Programme, funding of up to £4m will be made available for any school which is being refurbished or extended, with priority given to projects supporting amalgamation.

"Initially up to £20 million will be available for this programme in 2013-14 with the option of increasing this in 2014-15 depending on the number and quality of proposals," he said.

"This is also good news for the local construction industry and the economy, representing investment of almost £173million and will help create and secure jobs in a sector that has been badly affected in recent years.

"I have therefore tasked my officials to ensure that the projects I have announced today are moved forward with urgency," added the Minister.

The schools set to benefit from the funding have welcomed the announcements.

Jack Magill, principal at Foyle College in Derry, told UTV it will make a huge difference.

"The school is on a split site at the moment, two buildings a mile apart," said Mr Magill. "So we are very grateful to be getting away from that.

"That was our main reason for applying for the new school."

Victoria Park Primary School in east Belfast is also celebrating.

It is an amalgamation of four schools and has been a tight squeeze for the 330 pupils who were meant to move into new premises six years ago, as Andrea Gourley explained.

She said: "We are absolutely delighted - we have waited a long time for a new build to be announced, we were originally supposed to move in September 2006.

"So this is very long awaited and we really welcome the news."

Local MP Naomi Long, of the Alliance Party, added: "Victoria Park Primary School is working evidence of the ability to share within the schools estate and create value while still keeping the high educational standards that have served so many so well.

"Despite the seemingly continuous delays to this project, work can now begin on giving the pupils and teachers the modern, fit-for-purpose educational facility they deserve."

Sinn Féin MLA Gerry Kelly welcomed news that Irish medium primary school Bunscoil Bheann Mhadagáin will get a new building.

He said: "This is fantastic news for the whole community and the highest praise must go to the parents and staff of Bunscoil Bheann Mhadagáin for their dedication and determined campaigning.

"The development will not only improve the conditions for learning but create local jobs during construction and advance the Irish language sector in North Belfast as a whole."

Meanwhile the UUP's Danny Kinahan broadly welcomed the announcements but called for further capital investment to be provided.

"For those schools that have been fortunate in receiving a shared of the £173milliom there will be a great sense of relief amongst staff and parents," he said.

"However the sad reality is that there are still many schools across Northern Ireland, both primary and post-primary which have for a long time been demonstrating that further capital investment is needed."