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Under the bill, more than 2,000 school buses running on diesel fuel will be fitted by September 2011 with filters that reduce pollution inside the bus.

The bill comes after a 2001 study which found that students breathe in four to six times as much pollution inside the bus than people outside.

"Sometimes when we think about school buses or buses, we think just about the pollution they put out, if you think about it in the tail pipe in the back of the bus," said City Council Speaker Christine Quinn. "The other issue that's a problem for buses is the pollution that exists within the bus for the children who in the bus and this legislation address that and the issue of outside pollution."

Filters have already been installed in more than 2,300 buses. The legislation also calls for buses to be retired after 16 years of service.

Mayor Michael Bloomberg says he will sign the bill.