The government has announced new funding for school sport and PE worth £150m a year for the next two years.
As revealed by the BBC on Tuesday, ring-fenced money will be given directly to primary schools in England.
Schools will be able to pay for extra coaching sessions to improve the quality of sports and PE provision.
Prime Minister David Cameron said: "We can create a culture in our schools that encourages all children to be active and enjoy sport."
Cameron & Coe defend school sports funding
He added: "The Olympic and Paralympic Games marked an incredible year for this country and I will always be proud that we showed the world what Britain can do.
"I want to ensure the Games count for the future too and that means capitalising on the inspiration young people took from what they saw during those summer months."
The Government says the new scheme will involve:
Lump sums for schools - a typical primary school with 250 primary-aged pupils would receive £9,250 per year, the equivalent of around two days a week of a primary teacher or a coach's time
A greater role for sporting and voluntary organisations, including sport's National Governing Bodies (NGBs), who will increase the specialist coaching and skills development on offer for primary schools
Tougher assessment of sport provision by inspectorate Ofsted to ensure the funding is bringing the maximum benefit for all pupils, with schools held to account for how they spend the money
Sport England investing £1.5m a year of lottery funding through the County Sport partnerships to help schools link up with local sports coaches, clubs and sports governing bodies
More primary teachers with a particular specialism in PE via a new teacher training scheme.
The long-awaited policy is the result of months of talks in Whitehall, and comes after widespread calls for more investment in school sport to help build on the legacy potential of the 2012 Games. Despite record investment in elite and community sport in the last six months, the government has been criticised for making cuts in schools sports.
In 2010, £162m of ring-fenced funding for the national School Sport Partnerships (SSPs) was abolished, provoking an outcry. The network enabled well-equipped 'hub' secondary schools to lend PE teachers to those that needed them, especially primary schools.
Shadow Sports Minister Clive Efford said: "This money is extremely welcome but we would be in a much better situation had the government not taken £162m away from SSPs in 2010 and left the structures that were in place to crumble.
"David Cameron wanting praise for putting money back into school sport is like a burglar returning stolen goods and expecting to be hailed as a public hero."
Last month a four-year long Ofsted report concluded there was not enough strenuous, physical activity in many of England's school PE lessons, with teachers tending to lack specialist training, and a minority of schools playing competitive sport at a high level.
Andy Reed, chair of the Sport and Recreation Alliance, the umbrella organisation for the sport's governing and representative bodies in the UK, said: "It's a policy that will tick a lot of the boxes. There's investment, there's ring-fencing, there's NGB involvement and there's measurement, all of which were at the top of the list for sports bodies. There was a glaring gap in the Government's Olympic legacy plans and this policy addresses that.
"This is an acknowledgement that PE and sport should play a central role in every pupil's experience and that the skills they give children are as important as being able to read, write and add. It also recognises that it makes sense for schools to draw on the expertise of governing bodies as early and as deeply as practical.
"Ministers should encourage heads to embrace the wide variety of physical activity on offer to them so that every child can find something that they like."
Lord Coe, the prime minister's Olympic and Paralympic Legacy Ambassador, said: "When I stood up in Singapore in 2005 I spoke of London's vision to connect young people with the inspirational power of the Games so they are inspired to choose sport.
Speaking in December, Sports minister Hugh Robertson said the government would make an announcement about school sport in early 2013.
"Today's announcement does just that and by focusing on primary schools we have the opportunity to make sport and physical exercise a habit for life. I am particularly pleased to see the proposals around initial teacher training and continual professional development because I know from my own experience what an impact teachers and their engagement can have on the lives of young people."
Baroness Sue Campbell, chair of the Youth Sport Trust, said: "This is a landmark day for PE and school sport and now the work really begins to make sure this impressive investment benefits all young people.
"For many years we have been championing the need for greater investment in primary school PE and school sport provision, and it is welcome news that the Government has now recognised this as a priority area.
"If this funding is to reach every young person it is important to recognise that schools will need support in how to maximise its impact. Funding will need to be used in a way that makes high quality PE and sport sustainable, and embeds both within school life. Primary schools in particular will need support to achieve this.
"Investment in teacher training at primary school level is desperately needed. For too long a child's first experience of physical education has been delivered by teachers who lack the confidence and in some cases the competence to deliver PE well. We hope this investment will address that."
The new support for primary school is funded by the Department for Education, Department of Health and Department for Culture, Media and Sport.
Michael Gove, Secretary of State for Education, said: "We must harness the sporting spirit of 2012 for all our young people. We have listened to teachers, and to Ofsted, who have said that sport provision in our primary schools is far too often just not up to scratch.
"That is why we are putting money directly into the hands of primary head teachers to spend it on improving PE in their schools.
"By providing this money and reintroducing competitive sport back into the heart of the curriculum we can achieve an Olympic legacy in our schools we can be proud of."
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