Post Office branch closures will not go ahead after ministers backtracked on plans to scrap the minimum requirement.
The state-owned company will keep all of its 11,500 branches open in the UK after threats to close them by the Government.
Following a passionate public campaign, ministers acknowledged the role they played in Britain's ailing high streets.
The Post Office had also argued in a consultation that it needed to keep a nationwide presence.
It came after ministers indicated in a green paper last summer on the future of the service that they could scrap the requirement for a minimum number of branches.
Post Office minister Blair McDougall said: 'Post offices at the heart of our communities have delivered invaluable services on high streets across the country for decades.
'Protecting branches has always been our priority. I am proud to confirm the network will be safeguarded for the future and that the Post Office will have the certainty to implement its transformation plan.
'I would like to thank the postmasters and everyone who responded to the green paper - your contributions have helped shape the Post Office for generations to come.'
Ministers have backtracked on Post Office branch closures
He said that the minimum requirement would be kept to allow customers to use services such as sending parcels, banking and renewing IDs.
A new requirement will be introduced so half of all branches are open full-time and offer a full-service to improve the customer experience.
Ministers will keep the requirement of ensuring 99per cent of the UK population within three miles of their nearest outlet, and 90per cent within one mile.
Plans to modernise branches, including by installing more self-service devices, will cost £483million over the next two years.
The money will also fund the eventual replacement of the Fujitsu Horizon system at the centre of the scandal in which hundreds of subpostmasters were wrongfully convicted.
This is on top of the network subsidy funding to support the cost of delivering government policy, which will be £70million in the financial year 2026-27.
Neil Brocklehurst, its chief executive, said the extra funding represented 'a vote of confidence in Post Office's transformation'.
'It means we can continue to upgrade branches and their technology to provide the modern and efficient retail experience which our customers expect from their local post office.
'We will continue to work closely with postmasters, partners and Government throughout Post Office's transformation and, with the right conditions, I'm confident we will see a thriving Post Office network across the UK for generations to come.'
Following the Horizon scandal, the Post Office will develop a new strategy to improve its culture and change the way the system treats postmasters.
Mr McDougall said: 'While the Government remains focused on delivering redress to victims as rapidly as possible, we must also ensure that the culture that enabled those wrongs can never return.'
Tory shadow business minister Dame Harriett Baldwin, who has led the campaign to prevent closures, said: 'This U-turn is a victory for local communities and the over 180,000 people who backed the Conservative Party's campaign petition to save Britain's Post Offices.
'Post Offices are far more than a place to send letters - they offer key services for local businesses, help those not online access Government services, and help to keep our high streets alive.
'However, this important victory will be hollow if Labour's devastating jobs tax, astronomical business rate hikes, and mountains of red tape are still pushing Post Offices to the brink.'
