The Tertiary Education Union is welcoming the $128 million cash injection to the struggling sector.
Split over the next two years, it'll increase tuition subsidies by an extra four percent at degree-level and above.
The Government is also promising to review the funding system for universities.
Union National President Julie Douglas is hopeful the boost will allow Vice-Chancellors at Otago and Victoria universities to reconsider job cut proposals.
She says the universities have a level of autonomy over what to spend it on, but the money wasn't given for a new building and stems from a long union campaign.
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