Schools Chancellor Cathie Black announced Monday that the Department of Education has revised its policy requiring principals to hand over 50 percent of budget surplus for fiscal year 2012.

Under the new guidelines, school principals will now have to give back only 30 percent of any money they have left at the end of the school year.

“Over the last few weeks, I heard thoughtful feedback from principals across the five boroughs about how we can help them continue making prudent, long-term budget decisions, and we've crafted a solution to let them do that," said Black in a statement.

In the past, principals were encouraged to spend wisely – to save money and roll-over any left-over funds to spend when school starts again in the fall. The change prompted protests at schools across the city.

The DOE had said it would use the money to offset system-wide cuts. But principals argued those funds belong to the schools that saved them.

The mayor has signed off on the revision.