Sinn Fein's Caitriona Ruane intends to shift £41m from the school building "capital" budget to pay instead for services and staffing.
The plans are outlined in the department's budget plans for the period 2011/12 to 2014/15.
The money for school building work was already due to be cut and this decision will double the shortfall next year.
Education Minister Caitriona Ruane said she had chosen to transfer money from the school capital budget to "minimise the impacts in the classroom".
The minister plans to cut other costs, such as the bills for substitute teachers and school transport, the cost of providing computers, and support staff to schools.
However, road construction has done better in the cut-backs with the draft budget spending proposals and savings delivery plans for the Department for Regional Development (DRD) 2011-2015 also published.
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Regional Development Minister Conor Murphy said: "With a 40% reduction in the Executive's overall capital funding from Treasury over the budget period, this has had a significant impact on the draft budget available to DRD for infrastructure investment and difficult choices have had to be considered as part of this process.
"Nevertheless the DRD draft budget has allocated almost £2bn to capital investment over the budget period. This includes over £1.1bn for roads, around £185m for public transport and over £665m for water and sewerage services."
On roads, the allocations would allow the Department to continue development work on the A6 Dungiven to Derry scheme and begin construction of the A32 in Enniskillen, providing improved transport links and improving access to the new acute hospital in Enniskillen and the 85km dual carriageway on the A5 between Derry and Aughnacloy and the 14km dual carriageway on the A8 between Belfast and Larne.
The Minister said: "Structural maintenance would on average be at current levels totalling approximately £280m over the four year period. In the first year of the new draft budget, a record £94m will be spent on structural maintenance which should help to address the impact of recent severe winter weather on roads throughout the north.
"Roads Service will also continue to give priority to road safety when planning and carrying out its maintenance activities. This will include the upkeep of the road surface, drainage and road markings," he said.
(BMcC/GK)
