Leaving Cert students will be able to choose between a written exam and calculated grades in each subject this year.
And tests will take place in the traditional month of June after a deal was struck with unions last night.
Oral and practical examinations are scheduled for after Easter.
The Cabinet education sub-committee signed-off on a Government plan to hold the Leaving Cert written examination schedule and a parallel calculated grades system.
Education Minister Norma Foley acted after getting the essential backing of the teaching unions.
This support was vital as plans had stalled a number of times in recent weeks when the minister tried to move without the full approval of unions.
Ms Foley said the Government had approved a plan which was developed during intensive engagement by her department with stakeholders “to ensure a fair process so that Leaving Certificate students can progress to the next stage of their lives”.
She added: “All stakeholders have worked extremely hard to get to this point.
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“I have listened carefully to all and we have worked together to find solutions.
“Students and parents have been clear on the need for both clarity and choice which I believe this decision gives them.”
There was blanket support from opposition politicians for the certainty announced for students.
Labour education spokesman Aodhan O Riordain said: “We welcome the news a decision has been reached and that clarity will be provided to the class of 2021. There has been enough anxiety amongst students around the country and their biggest ask has been for certainty.”
But Mr O Riordain was critical when he compared the Department of Education to a “dysfunctional school debs committee” over their delays on getting schools reopened.
He said: “We want them to reopen safely, but unfortunately it’s come to the situation where we can’t believe anything that comes out of the Department of Education.”
However, last night there were renewed hopes that schools could start reopening from March 1.
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It had been reported during the week that ministers had agreed that date for the phased return of classes.
However, Taoiseach Micheal Martin and Tanaiste Leo Varadkar both said on Tuesday night the March 1 date was not correct.
But it appears this plan is back on after Mr Martin told Fianna Fail members at the parliamentary party meeting last night that “early March” is what they are aiming for.
When TDs asked if this could mean March 1, he said: “Yes.” Meanwhile, Junior Cert written exams have fallen victim to Covid for this year.
The priority for the Department of Education was always to get the Leaving Cert sorted and the logistics of hosting two national examination schedules has been considered too much.
It would have been impossible to have the proper socially distanced exam spaces for the two sets of tests to take place this June, so the Junior Cert has been shelved.
A spokesman for the Department of Education said: “The Junior Cycle examinations will not be run in 2021.
“Schools will be provided with guidance on continuing to engage this year group in online learning and assessment during the period of school closure and through in-person learning when schools reopen.”
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