A-level and GCSE students in Wales will now receive their teacher-assessed grades, the Education Minister has confirmed.
Kirsty Williams announced on Monday that all grades, including A-level results issued last week, will now be made on the basis of teacher assessment in a U-turn decision.
It follows claims from headteachers and unions that the country's system for allocating exam results for A-levels unfairly discriminated against some students.
In Wales, 42% of A-level results predicted by teachers were lowered by Qualifications Wales, leading to claims that its algorithm, which took into account the past performances of schools, had unfairly downgraded some pupils.
A proportion of students were awarded higher results than their teacher-assessed grades, but they will get to keep those grades.
Hundreds of people gathered outside the Senedd over the weekend to protest over the system. Students were later told they could appeal their A-level grades if they were lower than the predicted grades awarded by teachers.
Kirsty Williams MS said: "Given decisions elsewhere, the balance of fairness now lies with awarding Centre Assessment grades to students, despite the strengths of the system in Wales.
“I am taking this decision now ahead of results being released this week, so that there is time for the necessary work to take place.
“For grades issued last week, I have decided that all awards in Wales, will also be made on the basis of teacher assessment.
The First Minister defended the u-turn and said he had faith in the education minister on her decision. He said ''nobody could have worked harder'' to look after young people.
''We couldn't afford young people in Wales, who have to compete with young people elsewhere in the United Kingdom for university places, to be at a disadvantage,'' he said.
Prior to A-level results day the Education Minister made a last minute announcement that no student would be awarded a grade lower than their AS level grade.
But following results day there were calls for an urgent review as a number of schools said many results were “not a fair or accurate reflection".
The "standardisation" process has meant despite assessments from teachers that pupils would achieve 40.4 per cent of A* - A grades, just 29.9 per cent of students did.
The Welsh Youth Parliament called on the Welsh Government to trust teachers' suggested grades for students.
It said students have been left feeling "frustrated" and "angry" after receiving grades different to those from their teachers' estimations.
Conservative Shadow Education Secretary Suzy Davies MS said the announcement would come as a "very welcome relief for the thousands of A-level students who were looking at grades lower than they were predicted to receive."
She added: "It will also be a relief to pupils expecting results this week as well as an acknowledgement of quite how much effort teachers put into this."
Plaid Cymru said the review would be very welcome but was "seriously overdue", and has called on the Welsh Government to apologise to teachers, students and schools.
Shadow Education Minister Sian Gwenllian MS said: "The real victory belongs to the young people of Wales who have demonstrated better leadership and decorum than their government.
"Whilst it is regretful that this U-turn have come last week instead of putting students through so much unnecessary uncertainty and anxiety, I offer my congratulations to the young people who have led this campaign so ably."
The party has also called for an investigation into how the results process has been dealt with.
A Qualifications Wales spokesperson said: "We know that this is an extraordinarily difficult and upsetting time for learners, parents and their teachers, and there are many questions that we do not currently have answers to.
"We are working through the details and impact of this announcement and will provide updates as soon as we possibly can."