It will mean hundreds more patients, such as little Daisy Slatter, will benefit from a hi-tech solution to manage their insulin needs.
The five-year-old, from Ayr, was the youngest diabetic in Scotland to use a pump, which means that after years of multiple, daily insulin injections her life has been dramatically improved.
She was diagnosed with Type 1 diabetes in 2007, when she was just 18 months.
The pump makes it easier to administer the correct amount of insulin because it constantly monitors a user's blood sugar levels.
Daisy's mum Karen, 35, said it means she is less likely to have a hypoglycemic attack, which could have potentially serious consequences.
She said: "If her blood sugar level goes below four, and you don't act, she can have an attack and could go into a coma. With the pump it's much simpler to manage."
Daisy's dad Tim, 44, said: "When Daisy was diagnosed we immediately started a strict regime of hourly blood testing, diet control and four insulin jags a day, but her blood sugar levels were still erratic.
"We started insulin pump therapy in September 2008 and it helped to stabilise her blood sugar levels."
Daisy proudly showed off the pump, which sits on a belt round her waist, when she met Deputy First Minister and Scottish Health Secretary Nicola Sturgeon at the Glasgow Science Centre.
Ms Sturgeon, who made the announcement about the free pumps, said: "By the end of March 2013 this treatment will be made available to the 480 children and teenagers struggling with Type 1 diabetes who could benefit from it.
"Over the next three years, NHS boards will also increase the number of insulin pumps available to all Scots to 2000, tripling the current amount."
Jane-Claire Judson, national director of Diabetes UK Scotland said: "This piece of equipment, the size of a mobile phone, can be life changing for people with Type 1 diabetes."