Education secretary Michael Gove yesterday confirmed that 261 schools will be rebuilt through the Priority School Building Programme (PSBP) out of 587 that applied, leaving 326 unsuccessful.
Last July, the DfE announced the creation of the PSBP and encouraged bids from schools in need of urgent repair.
Gove went on to say that work will begin immediately and the first rebuilt schools will reopen in 2014.
For 219 of the schools, the DfE said, the cost will be met by a £2billion Private Finance Initiative scheme, while the 42 schools in the worst condition will be helped directly using £400million from the department’s budget.
David Simmonds, chair of the Local Government Association's children and young people board, said: "This funding is the result of councils’ pressure on DfE and will go some way to addressing the problems facing some of our most dilapidated schools.
"But we are still in a situation where more than 300 run-down schools have been left in limbo after lengthy delays in government decision-making."
Simmonds went on to say that parents and teachers "will have been left hugely disappointed by this announcement", adding: "The very suggestion that schools should wait several more years for answers, as suggested today, threatens intolerable delays that could severely impact on our children's education."
Gove acknowledged that many of the unsuccessful schools have "significant condition needs" and said that some would be helped through other maintenance funding or could receive renovation investment in the next spending review period.
He added: "I know that many schools will be disappointed not to be included in the programme.We have had to take difficult decisions in order to target spending on those schools that are in the worst condition.
"In order to ensure that the process was robust and fair, a qualified surveyor has visited every school for which an eligible application was received to verify the condition of the buildings.
"This was necessary to make sure the schools being taken forward are those with the greatest overall condition need."