Experienced teachers will be handed a 5% pay rise in a move that paves the way for an autumn of strike action.
Ministers confirmed wages would rise for staff more than five years teaching experience from September as part of new wage deals for public sector workers.
Starting salaries for teachers outside London will rise by 8.9%, with salaries reaching £28,000 in the 2022/23 academic year, the Department for Education said.
But this means the Tory commitment to hike starting wages to £30,000 by 2022/23 will be missed.
Unions reacted with dismay to the below-inflation offer, which was immediately branded a "real terms pay cut".
The National Education Union and the Association of School and College Leaders (ASCL) said they would press ahead with plans to ballot members on industrial action in the autumn.
The Government had proposed a 3% pay increase for most teachers in England to the independent pay review body earlier this year.
The-then Education Secretary Nadhim Zahawi - who is now the Chancellor - argued for 5% for most of the profession and 9% for teachers in their first five years.
But the boost was met with fury from union bosses, who said it amounts to a pay cut for hard working teachers with inflation at 9.1%
Kevin Courtney, joint NEU general secretary, said: "Given this very poor pay proposal, we will look towards consulting our members in the autumn. This will be the largest ballot of teachers for a generation.
"Teachers don’t want to strike – they want to be in the classroom teaching our pupils. But we cannot stand by and watch the biggest real-terms decline in teacher pay this century. This pay offer will do nothing to recruit, retain and value teachers and protect our children's education."
He said the union remained ready to negotiate with new Education Secretary James Cleverly.
He added: "But if it continues on this course into September, we will have no hesitation in recommending that our members take action."
Geoff Barton, ASCL General Secretary, said its members have "had enough" and would be consulted over industrial action.
He said: "This pay award is wholly inadequate and represents the worst of all worlds – a substantial real-terms pay cut for the majority of teachers which will worsen teacher shortages, and no additional money for schools to afford the cost of the award thereby exacerbating the dire financial situation they face because of rising costs.
"It is a double whammy that lets down the teaching profession and the pupils in our schools."
NASUWT boss Dr Patrick Roach said teachers would be "dismayed" by the news.
“Ministers have today delivered yet another pay cut for teachers," he said.
“After 12 years of pay freezes, pay pauses and below inflation pay awards amounting to a 20% real-terms cut, teachers will be dismayed to hear that the Government expects them to stomach the largest real terms cut to their pay.
“Experienced teachers and headteachers will be especially aggrieved about how they are being treated by the Government.
"They are already leaving in their droves because the Government is failing to value and support them properly. Today’s announcement will do little to stop that."
Mr Cleverly said: "Teachers are the fabric of our school system and it is their dedication and skill that ensures young people can leave school with the knowledge and opportunities they need to get on in life.
“We are delivering significant pay increases for all teachers despite the present economic challenges, pushing teacher starting salaries up towards the £30,000 milestone and giving experienced teachers the biggest pay rise in a generation.
"This will attract even more top-quality talent to inspire children and young people and reward teachers for their hard work."
