Detailed plans for the reforms have been considered and approved by the full WRU Board in a meeting at the Millennium Stadium on Thursday April 28.
The proposals had earlier been approved in principle by the Premiership clubs and other rugby stakeholders.
The changes will reform the Principality Premiership from 14 to 10 teams chosen on the basis of set criteria.
A Premier Division clubs proposal to introduce the reforms at the start of the 2011/12 season was rejected by the WRU Board as too soon.
Clubs qualifying for the Premiership at the end of the current season will have until May 22 to inform the WRU that they wish to be considered as one of the ten.
They will have to qualify for an A licence based on criteria, sign a Participation Agreement and achieve sufficient meritocracy based on their league results across the past six seasons to earn a place.
Also at the start of season 2012/13 the four teams relegated from the division will move into a newly formed National Champions League.
The identity of the ten teams which will form the ten club Premiership will be decided by the end of August 2011 but the WRU will not reveal the identities of the clubs until the end of December 2011.
Below the new National Championship League the existing SWALEC Division One East and Division one West will continue in their present form.
A new competition will also be organised involving the bottom four clubs in the new Premiership Division and the top four clubs from the Champions League. The schedule for this completion will be announced later.
The reform of the Premier Division has been put in place to ensure the sustainability of the league going forward and the quality of play in the semi-professional game in Wales.
The reforms are as a result of a review which began last Autumn and have already been considered and approved by the union’s regulatory and game policy committees, the WRU Executive, representatives of the National Management Team and the four Regional Organisations along with their representative body Regional Rugby Wales.
The review looked at funding, player numbers and quality along with competition structures.
WRU Head of Rugby, Joe Lydon, said: “These reforms have now been confirmed and we will now need to work even harder to form a strong future for this level of rugby in Wales.
“These are radical changes and as such were never going to be simple to achieve however it was important that they were agreed in totality and that the fundamental aims of the reforms have been recognised by all involved.
“The new formation of Premiership and National Champions League structures will ensure that the quality of rugby on show continues to improve and the funding available is best utilised.
“Our review clearly identified that the agreed role and purpose of the Premiership Division is yet to be fully realised but these reforms now mean that the level of funding to individual Premier clubs will be improved and as a result will assist the plans across the newly reformed division with regard to sustainability and development.
“The creation of a new National Champions League offers an exciting new level of rugby for both players and supporters to enjoy. This new league will form the top strata of the community game in Wales.
“The ten team Premiership will be able to flourish as an entity and will I am sure now help to underpin the player development models in conjunction with our regional partners and hopefully on into the senior national squad..
The Chairman of the Premier Division clubs, Chris Clarke, of Cross Keys said: “Of course there are clubs which will be bitterly disappointed at losing their Premiership status but we have to be realistic and make tough decisions in the interests of Welsh rugby.
“We will all play our roles in ensuring the Premiership Division can now grasp this opportunity to improve standards.
“There are big changes ahead to achieve these reforms and we must work together to make sure the transition is as smooth as possible.
“The possibility of reform has been a matter of debate for some considerable time so now is the time for those discussions to turn into reality.”
Clubs seeking to be one of the ten remaining Principality Premiership teams will now be able to apply for the new status.
Any of the 14 clubs which qualify for the current Premiership for the start of season 2011/12 will be able to apply to become one of the ten.
The new Premiership clubs will all sign a Participation Agreement and Rugby Charter which will safeguard rugby, player welfare and the commercial strategies of all the teams involved.
The clubs demoted from the current Premiership will receive parachute payments for the first two years they are in the new Champions League.
Eighteen months after the launch of the new structure new applications for A licences will be considered by the WRU. If there are successful applications beyond the existing ten clubs membership of the top division will be on merit as well as criteria.
Under the plan each of the four regional organisations will be aligned to a minimum of two and a maximum of four Premiership Division teams.
WRU Chairman David Pickering hailed the changes as an important series of reforms which will help the game achieve a sustainable future in Wales.
He said: “These reforms will create a Premier Division which is fit for purpose and in good shape to deliver quality players into the Regional structure in Wales.
“This has been a difficult but necessary process and I applaud the good grace with which the clubs and the WRU Board have delivered these changes.
“Now we will all have to work hard to ensure the reforms are put in place properly within a truly transparent process.”
