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San Francisco Unified School District Superintendent Carlos Garcia said the move would allow 405 of the 506 teachers given layoff notices to return to their jobs next year.
"It just goes to show, that San Francisco is a very unique place, where really children do come first," said Garcia.
He later noted that the district was still trying to fill its $29 million budget deficit, and to do so, among other adjustments, has had to increase some class sizes.
Mayor Gavin Newsom called the rainy day allocation "a milestone," especially as other school districts throughout the state continue to face increased teacher layoffs, he said.
"There's nothing more threatening to public education than having teachers worried about their jobs," he said.
Dennis Kelly, president of the teachers union United Educators of San Francisco, also hailed today's news, but said about 27,000 teachers statewide have been given pink slips that won't be rescinded.
"The continuing crisis needs San Francisco-type values" to solve the problem, Kelly said.
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