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The Prime Minister Boris Johnson reached out to Manchester United footballer Rashford personally over the phone to let him know he'd be laying on £170 million for the plan, after initially refusing to fund kids' meals over the holidays.
In a move which has left campaigners thrilled, the PM then announced the Covid-19 Winter Grant Scheme, which promises to help families who need it over the festive season.
The Department for Work and Pensions (DWP) also announced the Holiday Activities and Food programme will be extended up until next year's Easter, summer and Christmas breaks.
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This means that mothers-to-be as well as families on low incomes with young children will see their benefits to buy fruit and vegetables grow to £4.25 a week from £3.10 to from April, in a boost to the Healthy Start payments.
In a comment after the news was announced, Rashford said he was "so proud" of everybody who had supported his campaign, adding that it was the "perfect day" for him.
He also said he was "overwhelmed by the outpouring of empathy and understanding" the country had shown.
The footballer promised to "fight for the rest of [his] life" to ensure that child hunger in the UK is no more.
"Following the game today, I had a good conversation with the Prime Minister to better understand the proposed plan, and I very much welcome the steps that have been taken to combat child food poverty in the UK," he said in a statement.
"There is still so much more to do, and my immediate concern is the approximate 1.7 million children who miss out on free school meals, holiday provision and Healthy Start vouchers because their family income isn't quite low enough.
"But the intent the Government have shown today is nothing but positive and they should be recognised for that.
"The steps made today will improve the lives of near 1.7 million children in the UK over the next 12 months, and that can only be celebrated."
It comes after Conservative MPs came under intense criticism for voting against Labour's plan to extend free school meals last month.
In response to their decision, the public rallied together to help children where the government hadn't, with local councils, small and large businesses and even individuals offering anything they could to ensure that nobody went hungry over October half-term.
And striker Rashford's petition for families to be helped over the holidays reached over one million signatures, putting intense pressure on the government to change their minds.
He added: "I don't want any child to go through what I went through, and any parent to experience what my mother experienced. I now call on the government to collaborate with the child food poverty taskforce to guarantee that no child does.
"As a collective we are so powerful and we all have a role to play in this. Today, I'm overwhelmed with pride that we have made such significant progress. We will not give up on our children. We will not give up on the future of this country."
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