The £200m bill to replace Grenfell Tower-type cladding on about 150 private high-rise blocks in England is to be met by the government.
Housing Secretary James Brokenshire had previously said the bill should be footed by the owners, not the taxpayer.
But he said owners had been trying to offload the costs on to leaseholders and that the long wait for remedial work had caused anxiety for residents.
Leaseholder groups said the news would be a “relief” but more was needed.
Seventy-two people died when a fire destroyed Grenfell Tower, in west London, in June 2017, in one of the UK’s worst modern disasters.
It took minutes for the fire to race up the exterior of the building, and spread to all four sides.
A public inquiry into the fire heard evidence to support the theory that the highly combustible material in the cladding was the primary cause of the fire’s spread.
Latest government figures show that 166 private residential buildings out of the 176 identified with aluminium composite material (ACM) cladding – the same type used on Grenfell Tower – are yet to start work on removing and replacing it.
Mr Brokenshire admitted he had changed his mind on demanding that freeholders pay up for safety work.
He said some building owners had tried to pass on the costs to residents by threatening them with bills running to thousands of pounds.
“What has been striking to me over recent weeks is just the time it is taking and my concern over the leaseholders themselves – that anxiety, that stress, that strain, and seeing that we are getting on and making these buildings safe.”