The review initially focused on Post 16 Learner Travel, but its scope has now been extended in light of the issues raised over past months.
As well as the 4-16 year old age group being included in the review, it will also consider the current mileage threshold.
Currently primary school pupils are entitled to free transport if they live outside two miles of their school, and secondary school pupils can get free transport if they live outside three miles of their school.
The aim is for the review to be completed by the end of March 2021.
Lee Waters, Deputy Transport Minister, said:
“It’s clear that it isn’t always practical or safe for children to walk or cycle the current distances to school so we are trying to find a common sense solution that helps our young people travel safely.
“Our wider agenda for active travel means this is a delicate balancing act between encouraging more pupils to walk and cycle, and ensuring they continue to have safe school transport. We’ll do what we can to make sure parents are not left with no alternative but to drive their children to school.
Kirsty Williams, Minister for Education, said:
“Widening the scope of the review will ensure more people can benefit from potential changes. These issues, which have been raised with us by families, will be given detailed consideration over the coming months.
“We will work closely with local authorities, the Children’s Commissioner and the Welsh Language Commissioner to ensure this review delivers improvements for pupils and families.