A £1.3 billion investment in the Post Office was announced today, with the aim of "transforming" thousands of branches, including longer opening hours.
Around 6,000 post offices will be converted into more modern branches over the next three years in what was described as a "once-in-a-generation" opportunity to revitalise the network.
The Government repeated its pledge that no more post offices will close, but the postal workers' union warned that making wholesale changes to the network was a "major gamble" and involved "downgrading" some branches.
The Post Office said all its 11,800 branches will benefit directly or indirectly from the investment, which is subject to European Union state aid clearance.
Almost half of post offices will convert to a "new operating model", covering either larger branches, which will offer extended opening hours, or "local style" offices, where a post office counter will operate inside a convenience-type store, also with longer hours.
Subpostmasters who convert to a main style branch will be offered up to £45,000 to help the change, while those opting for a local style will have access to investment of up to £10,000.
The programme was aimed at making the post office more self-sustaining and less dependent on subsidies, said the post office, adding that the number of weekly visits to offices had fallen from 28 million to 20 million in the past 12 years.
The £1.3 billion was announced by the Government in 2010, but this is the first time details have been given on how the money will be spent.
Paula Vennells, chief executive officer of Post Office Ltd, said: "This is a once-in-a-generation opportunity for the Post Office - a chance to revitalise the network and allow it to meet the needs of 21st century customers and communities.
"This major investment will help Post Office Ltd address changing customer needs by revitalising the network, with extended opening hours and a better experience for our customers."
Postal Affairs Minister Norman Lamb said: "Post Offices are at the heart of many of our communities, providing much needed services. This Government has made a commitment that there will be no closure programme and invested £1.34 billion to secure the long term future of the Post Office.
"However, change is needed to secure the long term future of post offices. Pilot schemes are showing the new 'locals' and 'mains' models are popular with consumers and subpostmasters, so I am pleased that Post Office Ltd are putting in place another 6,000 of these post offices over the next three years. The new models will make the network more financially viable and give customers what they want when they want it."
George Thomson, General Secretary of the National Federation of Subpostmasters, said: "This investment will bring significant benefits to customers, communities and local businesses right across the UK. It provides a great opportunity for thousands of subpostmasters to modernise their post offices creating an improved, more sustainable network.
"I believe the significant commitment from the UK Government will help secure Post Office branches at the heart of our communities for the long term."
Communication Workers Union general secretary Billy Hayes said: "The Post Office is taking a major gamble with our postal service and the livelihoods of postmasters with today's announcement - which is deeply one-sided and full of spin. The voice of customers and postmasters is missing and they will bear the brunt of failures in the post office network.
"There are serious flaws with the downgraded locals model which deny services to customers - not even the ability to post parcels in many cases - while only making them available at tills in convenience stores and petrol stations.
"There comes a point at which it's no longer a post office. To access full services people will have to travel to a Crown or main post office."
Mike O'Connor, chief executive of Consumer Focus, said: "The post office network needs to be put on a firm footing for the future, so it can continue to serve communities who rely on their local post office. Many post offices are economically unsustainable and the network as a whole needs improvement and investment.
"The scale of the task is considerable, and it is both an enormous opportunity and challenge for Post Office Limited. These huge changes will affect over half the post offices in the country and the people who use them. What will matter to customers is that this programme delivers improvements and provides a sustainable and accessible local network which meets their needs."
Sarah Lee, head of policy at the Countryside Alliance, said: "While the Countryside Alliance welcomes the large new investment, we are concerned that the rollout of the Post Office Locals model could see many rural communities lose their post office, or see a significant reduction in the number of services to which they have access, such as manual cash deposits and withdrawals, manual bill payment services and on-demand foreign currency.
"People living in the countryside have to travel much further to access banks, building societies and cash points. Our greatest fear is that these changes will leave many of the most vulnerable members of society in rural areas unable to access basic services, transforming vast swathes of the countryside into a desert for financial services.
"And we again question whether the changes announced today are consistent with the Coalition's pledge to make the Post Office the front office for government."