The replacement and removal of unsafe cladding by councils will be fully funded by the Government, at an estimated cost of £400m.
The funding will enable councils and housing associations to remove Grenfell-style cladding from tower blocks.
The Government said it recognised councils were having to take decisions about how to prioritise services, repairs and maintenance work, and investment in new homes.
Chancellor Philip Hammond said: ‘We have always been clear that unsafe cladding must be removed from tower blocks so that people are safe in their own homes.
‘But we do not want vital safety work to put at risk our high priority house-building programmes. So we have decided to provide funding to ensure that housing associations and councils can carry out this vital work.’
The announcement has been welcomed by the council leaders. Lord Porter, Local Government Association chairman, said: 'While the priority for councils has been getting on with what they need to do to ensure people are safe in their homes following the Grenfell Tower tragedy, the LGA has been involved in public and private conversations with the Government about the financial implications.
'It is great that the Government has honoured its commitment from last summer to meet the unexpected exceptional costs for councils arising from major remedial fire safety work on high-rise buildings.'
Figures show 158 social housing buildings are fitted with unsafe cladding.
