Fewer 'privilege seats' will be available on school buses from this September, the Isle of Wight Council has warned.
Parents and guardians of children affected by changes to the council's home to school travel contract will be written to this week.
The council said the majority of the 900 pupils eligible for home to school transport assistance would receive a school bus seat.
Others will receive a pass for a public bus with some being given a train pass to use on Island Line.
Privilege seats have only been available in recent years due to the contracted service having too many surplus seats compared to the number of children eligible for local authority funded transport.
Those spare seats are sold on a first come first served basis to parents who choose to send their child to a school outside their catchment area.
The privilege seat fee that parents pay goes some way towards offsetting the cost of the seat, but each spare seat costs the council around 1,000 pounds per year.
With the current five-year home to school travel contract about to expire, the council aims to procure a service that best matches demand.
An Isle of Wight Council spokesperson said: "As a result we anticipate that the number of available spare seats on buses and coaches will reduce significantly from September 2020.
"The savings brought about by these contractual changes were agreed by Full Council in February and will help the council to continue to deliver all essential services to residents."
Some information on transport options can be found here.