Wales' four regions have announced a salary cap amid fears of a mass player exodus to France.
Each of the four teams will spend a maximum of £3.5m on Heineken Cup and Amlin Challenge Cup squad members.
The cap begins in July 2012 and the Welsh Rugby Union has welcomed it.
"The regions have come together with a shared sense of responsibility to get their own houses in order and find solutions," said Regional Rugby Wales chairman Stuart Gallacher.
"This agreement is the start of that journey. They are eager to do all they can to achieve greater self-sufficiency and our governing body the WRU has been wholly supportive of and endorsed the initiative we have taken.
"This is a powerful signal of our determination to achieve our aims amidst some tough economic challenges in Wales now and in the future.
"All four regions are working very hard indeed to manage their businesses more effectively in a very difficult environment for everyone.
"As part of that, it is essential that every element of the circa £30m annual costs involved with operating four professional rugby businesses in European competition, is examined in detail and managed effectively.
"The introduction of this agreement and the European squad salary cap illustrates pragmatic and responsible action in tough times.
"Nobody will make light of the challenges ahead but initiatives like this new salary cap must give our rugby supporters renewed confidence in our ability to move with the times, be decisive and make a stand with cohesion and a shared vision and united spirit."
In the statement released by the WRU, chief executive Roger Lewis said: "I applaud the regions for the way they have achieved this agreement with one unified voice.
"The WRU invests £6m in cash every year to the four regions, in addition to its funding of the four regional academies so is delighted to see the approach to build greater sustainability being taken."
Wales props Adam Jones and Gethin Jenkins are among those linked with moves to France.
Luke Charteris could play there next season while James Hook, Lee Byrne and Mike Phillips are already in France.
Clubs in England's Premiership operate their squads on a total salary budget of £4m per season.
Senior figures at the regions -Cardiff Blues, Newport Gwent Dragons, the Ospreys and Scarlets - have expressed their views over the issue.
And they have made calls for the WRU to provide extra cash in a bid to persuade star players not to move to any French Top 14 and English clubs or further afield.
Dragons lock Charteris is the latest player to announce he is leaving Wales and could line up alongside Hook at Perpignan next season.
Scrum-half Phillips left the Ospreys for Bayonne at the end of last season while Lee Byrne went from the Swansea-based region to Clermont Auvergne.
Hook, Phillips and Byrne linked up with their clubs after the World Cup in which the stock of many leading Welsh players rose as they reached the semi-finals and then finished fourth following defeat by Australia.
Since then Ospreys prop Jones and fellow British and Irish Lion Jenkins, of the Blues, have been linked with moves to France.
Dragons wing Aled Brew is also reportedly a Perpignan target while the Scarlets fear young stars such as fly-half Rhys Priestland, wing George North and centres Jonathan Davies and Scott Williams could also fall prey to foreign clubs.
Wales coach Warren Gatland has warned players their Test careers could suffer if they move to clubs outside Wales.
He has urged any players doing so to ensure their contracts allow them to fulfil all Wales' playing and training commitments.
Two weeks before the 2012 Six Nations Wales will travel to Poland for a training camp and Gatland has said players unvailable for it may not be considered for the tournament.
WALES TEST PLAYERS IN EXILE
Gareth Delve - Melbourne Rebels
Mike Phlllips - Bayonne
James Hook - Perpignan
Lee Byrne - Clermont Auvergne
Nicky Robinson - Wasps
Craig Mitchell - Exeter
Andy Powell - Sale
Dwayne Peel - Sale
Martin Roberts - Northampton
Rhys Gill - Saracens
Ben Broster - Wasps
Jamie Robinson - Agen
Eifion Lewis-Roberts - Toulon
