The £2 fare cap for some bus routes will be extended until the end of October – before rising to £2.50 until November 2024.
The scheme – introduced at the start of this year – had been set to end by 30 June, but the government says it will now run for longer.
Extending the programme will cost the Exchequer an extra £200m – with Transport Secretary Mark Harper also pledging £300m to “protect vital routes and improve services”.
But Labour claims the announcement “risks more vital services being slashed” after a “near-record numbers of buses” were “axed” last year.
A Confederation of Passenger Transport report from earlier this month said that £390m was needed over the next 18 months to keep service levels the same, rather than the £300m promised.
And data suggests that about 1,000 routes have already stopped in the past year.
London, Greater Manchester, Merseyside and West Yorkshire are not covered by the £2 scheme, as they already have fare caps in place.
A full list of routes included can be found on the government website.
The government says that capping fares at £2.50 until November 2024 “will create longer-term certainty for bus users over the next year” – adding that it will be reviewed ahead of the cut-off.
The £300m will be “shared between local transport authorities and bus operators”, the government added.
It said that £2bn has been provided to help the bus industry recover from the pandemic.
A spokesman said: “While it is the responsibility of bus operators and local transport authorities to ensure an adequate provision of bus routes, the government continues to work closely with the sector to support local areas in dealing with changing travel patterns while managing pressures on the taxpayer.”
Prime Minister Rishi Sunak said: “By extending the £2 fare cap, we’re making sure bus travel remains accessible and affordable for everyone, while helping to ease cost of living pressures.
“Buses connect our communities and play a vital role in growing the economy; they transport people to work, take our kids to school and make sure patients can get to doctors’ appointments.
“That’s why we’re determined to protect local routes and encourage more people onto the bus, ensuring people can get around easily and in an affordable way.”
Labour argued the government was failing to protect bus routes.
Louise Haigh, the shadow transport secretary, said: “The Conservatives need to come clean – this announcement risks more vital services being slashed, while communities are denied any say whatsoever.
“With a near-record number of buses axed last year, it’s clear the Tories’ broken system is failing millions, and they have no plan to fix it.
“Labour will launch the biggest reform of buses in a generation, ending the Tories’ broken system, and handing power and control of routes, fares and services back to the communities who depend on them.”