Wizz Air becomes the company's fourth base in the UK, joining Luton Airport, Doncaster Sheffield Airport and Gatwick Airport.
Welsh travellers will be able to board flights to destinations including Alicante in Spain, Faro in Portugal, Larnaca in Cyprus and Tenerife with fares starting from £12.99 one-way.
The Welsh Government said it is a significant investment and creates almost 300 jobs, supporting the aviation, transportation, hospitality and tourism industries.
It means the annual capacity of Cardiff Airport has increased by more than 350,000 seats, which it is hoped will boost the local economy.
The nine destinations you can fly to from Cardiff through Wizz Air
Sharm El Sheikh, Egypt
Lanzarote, Canary Islands
Tenerife, Canary Islands
The economy and transport minister said the base launch will help Cardiff Airport emerge from the impact of the coronavirus pandemic.
Ken Skates MS added: "I look forward to seeing the first flights take off and further growth over the coming years."
The investment sees the Welsh Government-owned airport's first budget airline base since the launch of Bmibaby in 2002, which collapsed nine years later.
Wizz Air is aiming to add a further 50 aircrafts across its UK operations over the next five years.
The airline was also recently announced as the new title sponsor of the Cardiff Half Marathon, with the first Wizz Air Cardiff Half Marathon scheduled to take place on 2 October 2022.
The airline's launch in Cardiff comes after Covid restrictions around international travel to and from Wales have were removed last month.
But the Welsh Government is still advising people to take precautions such as lateral flow testing and self-isolating if they have symptoms.