Editor's note: Were government promises to rebuild New Orleans kept? CNN's Anderson Cooper returns to the Gulf Coast to see what has changed since Hurricane Katrina. Don't miss "In Katrina's Wake," an "AC360°" special at 10 p.m. ET Thursday on CNN.
(CNN) -- The federal government will award $1.8 billion to New Orleans schools damaged by Hurricane Katrina, U.S. Sen. Mary Landrieu, D-Louisiana, said Wednesday.
A provision in an appropriations bill authorizes the Federal Emergency Management Agency to provide a lump-sum payment for K-12 schools damaged by hurricanes Katrina and Rita.
"The provision also reduced penalties for insufficient flood insurance and alternate projects, which yielded more than $500 million in savings for Louisiana schools," Landrieu's office said in a statement.
"This $1.8 billion lump sum settlement is one of the great victories in our fight for a smarter recovery," Landrieu said.
"It was a battle worth waging and while we would have liked to have received the money sooner, it was worth the wait. This lump sum approach is a much wiser investment of taxpayer dollars and should serve as a model for the right way to rebuild communities following a major disaster."
New Orleans schools are still rebounding five years after Katrina struck.
The money gives "local leaders the ability to rebuild New Orleans' school system in a comprehensive and strategic manner, instead of using a uncoordinated and piecemeal approach," Landrieu's statement said.
The Orleans Parish School Board and the Recovery School District are reducing the number of campuses from 127 to 87.