U.S. Department of Education spokesman Justin Hamilton says nine states and the District of Columbia were chosen. The winning states are Florida, Georgia, Hawaii, Massachusetts, Maryland, New York, North Carolina, Ohio and Rhode Island.
The competition has instigated a wave of reforms across the country, as states passed new teacher accountability policies and lifted caps on charter schools to boost their chances of winning.
Tennessee and Delaware were named winners in the first round of the competition in March, sharing $600 million.
Tuesday's winners will share a remaining $3.4 billion.