Despite universities in England being able to charge fees of up to £9,250 next year, Welsh institutions will see their fees being pegged at £9,000 a year.
Students from Wales will also be able to claim up to £4,954 in grants and borrow the rest, wherever they study.
According to Education Secretary Kirsty Williams: "This decision gives certainty for those who want to go to university for the academic year 2017-18, giving people the option to study where they choose, including in England where tuition fees are set to increase."
At present, students from Wales pay the first £3,900 of their annual tuition fees, with the Welsh Government paying up to £5,100.
Ms Williams also announced a means-tested maintenance grant of up to £5,161, which it is hoped will encourage those from poorer backgrounds to attend university.
However, Swansea University vice-chancellor Prof Richard Davis warned that Welsh universities could become second rate, if they are unable to increase their fees as in England.
Meanwhile the National Union of Students welcomed the news. President Fflur Elin said: "We want to ensure that students from all backgrounds can access high quality courses. The cost of the courses should not be a barrier".