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Education Minister Chris Hipkins said Sara Cohen School's buildings in Caversham were in a poor state, and "badly in need of a major revamp''.
"Portions of the school buildings are experiencing weather-tightness issues and have insufficient heating and ventilation.
"This Government is commited to ensuring that all children are able to access the facilities they require.''
The school would have a "better layout'' and improved access for students.
"We are prioritising spending to remove barriers to young people's access to education and learning. We want to ensure every child with learning challenges has access to the tools and professionals they need.''
Funding has also been granted to Anderson's Bay School and Grant Brae's School for new classrooms, part of an $8 million package benefiting eight schools around the South Island.