Every area in England will receive a cash increase of at least 17% over the next five years, including a minimum rise of 4.4% next year.
Some £1 billion a year will be distributed according to the greatest need, with a redeveloped fairer funding formula channelling extra money to places with the highest rates of early death and unmet health needs.
Other changes will mean more investment from April targeted at areas with higher needs for community services for the first time and give greater regard to need for mental health services.
The allocation of funding for local Clinical Commissioning Groups follows publication of the NHS Long Term Plan setting out the priorities of the health service over the next decade.
NHS England chief executive Simon Stevens said: “This funding backs delivery of the NHS long term plan in every part of England for the next five years.
“It will fund cutting edge treatments such as genome tests for every child with cancer, build up community services to provide more joined up care while taking pressure off hospitals and address the unmet need for mental health services.
“Tackling health inequalities in our society is not just about fairness but is a matter of hard-headed economics which will not only save lives but also save taxpayers’ money and NHS staff time.
“The public can be confident that the NHS will make every penny count, with data published by the Office for National Statistics yesterday showing productivity for health services in England grew by 3% in 2016/17, over three times the growth for the wider UK economy in that year.”
Under the new fairer funding formula two of the areas with the worst rates for premature deaths, Blackpool and Bradford City, will receive increases of 11% and 13% respectively next year alone meaning they have £40 million and £26 million more to invest.
The NHS Long Term Plan, unveiled on Monday, will save an estimated 85,000 more lives each year through earlier detection of killer conditions such as cancer and heart problems and a renewed focus on prevention.
The measures will help prevent 150,000 heart attacks, strokes and dementia cases while more than three million people will benefit from new and improved stroke, respiratory and cardiac services over the next decade.
There is also a new, historic guarantee that investment in primary, community and mental health care will grow faster than the growing overall NHS budget.
This will fund a £4.5 billion new service model for the 21st century across England, where health bodies come together to provide better, joined up care in partnership with local government.
The measures to tackle major physical conditions comes alongside the biggest ever investment in mental health services rising to at least £2.3 billion a year by 2023/24.