Young people will be able to ride for £1 on buses across Wales as part of a budget deal between Welsh Labour and the Welsh Liberal Democrat leader Jane Dodds.
The deal, worth more than £100m, will also see extra money to expand childcare to all two year olds.
It means the Welsh government’s £26bn spending plans for the NHS, education and other public services will pass in the Senedd next month, and includes a ban on greyhound racing and cash for local councils.
Dodds said the agreement “is a positive step in making Wales the fairer and more prosperous country I want it to be”.
Finance Secretary Mark Drakeford added: “The additional investment will make a real difference to communities across Wales, particularly in rural areas”.
The Welsh government needs the help of one opposition politician to get its budget passed in the Senedd when it comes to a vote in March.
Under a £15m pilot scheme, young people aged-21 and under will be able to travel anywhere in Wales for any journey for £1, with unlimited travel for £3.
It will run for one academic year, from September 2025.
Nine local authorities will benefit from a boost to their funding, worth £8.24m, ensuring no council receives less than 3.8% extra in cash next year.
While overall council funding was raised by 4.3%, because of the way the formula for funding works some authorities would see less, with Monmouthshire receiving an increase of 2.8% and Powys and Gwynedd 3.2% each.
The Welsh Local Government Association leader, Labour’s Andrew Morgan, said: “Over a decade of cuts by previous governments cannot be undone overnight in a single budget. But this settlement is a decisive step in the right direction.”
The Welsh government has promised an extra £30m for social care and £30m for childcare.
The latter will increase the amount paid per child per hour to £6.40. Officials hope it will be enough to expand childcare to all two year olds.
Funding will be given to restore the fifth train service on the Heart of Wales line that runs from Swansea to Shrewsbury.
A total of £5m would be offered to improve playgrounds and play facilities, £5m for water quality, and extra support to help councils borrow £120m for road and pavement repairs. £5m will be offered to leisure centres so they can be more energy efficient.
An extra £5m will be given to tackle water pollution, and £10 for rural investment schemes.