The Adoption Support Fund (ASF), which has provided support worth £100m to more than 35,000 families in England since its launch in 2015, was due to end in March 2020.
However, the Department for Education has committed additional funding that sets November as the final month where applicants can receive up to nine months of support. This means that support will be available until July 2020 for some.
The future of the fund was due to be announced in the government's Comprehensive Spending Review in November, but the department said it recognised that there was uncertainty among adopters about future arrangements.
"Normally the government does not commit any funding for a future financial year before a spending review settlement is known," a DfE document containing details of the extension states.
"However, the government is mindful that the ASF has been a great support to children and families and wanted to reassure families that where therapy has started they could continue to access this therapeutic support as we transition from one spending review period to another."
Despite this, a decision on the future of the ASF could be delayed depending on the outcomes of the government's Brexit negotiations.
Adoption UK chief executive Sue Armstrong Brown said the extension provided a lifeline to families bringing up vulnerable children.
"Many families will be mightily relieved about the reprieve to the ASF," she said.
"But there's no doubt that anxieties will persist until the government makes a long-term commitment to supporting adoptive families.
"We will continue to work with adopters to make the case for the help their children deserve."
Children and families minister Nadhim Zahawi said the ASF could "change lives".
"But there are still too many children waiting to be adopted," he continued.
"That's why we are committing additional funding ahead of the spending review settlement, allowing some families to continue drawing support beyond March 2020 where the therapy has started in 2019."
Demand for the funding is so high that in October 2016 the DfE introduced a cap limiting claims to £5,000 per child.
In September last year, the department also dropped a five-day target to review applications for support, citing "an increase in application process times". It currently aims for applications to be completed in a maximum of 20 days.
A DfE-commissioned evaluation of the ASF, published in August 2017, reported high levels of demand and a lack of support in the community for families in areas such as cognitive therapy, play and music therapy and parenting skills training.