Video report by ITV News Correspondent Angus Walker
The Government has resisted pressure to lift the public sector pay cap as it was announced teachers' pay will remain capped at 1%.
The recommendation of the School Teachers' Review Body (STRB), which said there should be a 1% increase for all pay ranges, has been accepted by the Government.
Teachers' pay has been frozen since 2010 and the National Union of Teachers (NUT) has calculated that teachers' wage increases fell behind RPI inflation by 13% between 2010 and 2016.
The latest announcement means another real-terms pay cut for more than half a million teachers in England and Wales.
Labour has pledged to scrap the 1% ceiling and Prime Minister Theresa May and Chancellor Philip Hammond have been under pressure to lift the cap since the election.
In a written statement, Education Secretary Justine Greening said the STRB's recommendations, due to be introduced in September, "are consistent with the Government's 1% public sector pay policy".
"Following previous reforms, schools already have significant flexibility, within the pay ranges, to set pay for individual teachers, taking account of performance and retention," she said.
Russell Hobby, general secretary of the National Association of Head Teachers, said the move could affect teaching standards.
"We will not be able to attract the best and brightest to teaching if we constantly cut their pay," he said.
The Government has accepted a recommendation that teachers on the minimum of the main pay scale get an increase of up to 2%. These are typically teachers in the first few years of their career. There was a similar recommendation two years ago.
The STRB is one of a number of independent bodies that put forward recommendations for wage increases, which are then accepted or rejected by Government departments.
In recent years, these recommendations have been affected by a Government cap on public sector pay as part of austerity measures.
After the 2010 general election, there was a two-year pay freeze with school staff receiving a zero increase in 2011 and 2012. Since then, there has been a cap of 1%.
Last week, Mrs May poured cold water on calls to end pay restraint, telling MPs at Prime Ministers' Questions that upcoming recommendations from review bodies - including the STRB - would be "very carefully considered".
Labour leader Jeremy Corbyn accused her of "recklessly exploiting the goodwill of public servants" and there has also been pressure from government ministers to change the position.
Health Secretary Jeremy Hunt said he had "a great deal of sympathy" for nurses' demands for higher rises, sources said Foreign Secretary Boris Johnson privately backs a wage boost for public sector staff and Defence Secretary Sir Michael Fallon said pay rates were "obviously something we have to consider, not just for the Army but right across the public sector as a whole".