The payments to players are based on rewarding success over and above a basic fee.
The contract identifies and establishes basic match fees, bonuses and commercial player appearances on behalf of the WRU in a unique all-embracing deal.
This new agreement also assures match funding for players selected for any Wales A games to underline the aim of the WRU to bring back the second tier senior internationals in future and build upon our player pathways.
The deal was concluded this week by the WRU Group Chief Executive Roger Lewis in private meetings in Poland and Wales with Wales captain, Matthew Rees, and Players Chair (WRPA), Gethin Jenkins.
It currently makes Wales the only rugby nation with a player agreement which runs until after the 2015 Rugby World Cup.
Negotiations began in December 2010 with Roger Lewis, Steve Phillips, the WRU Group Finance Director, Rhodri Lewis, WRU Head of Legal Affairs, the WRPA General Secretary Neil Maclean-Smith and WRPA President, Rhys Williams.
Recent meetings have involved a number of other senior players with the WRU executive, while senior squad players Gethin Jenkins and Matthew Rees have been a constant presence in the negotiations.
The deal also secures £130k a year from the WRU to fund the running of the Welsh Rugby Professional Players Association for the full term of the new contract to ensure proper player welfare and development programmes are delivered by the WRPA.
The five-year contract is the longest running player contract brokered by the WRU since the introduction of professional rugby.
The WRU Group Chief Executive, Roger Lewis, said: "I am delighted we have been able to agree such an all embracing and groundbreaking five-year deal. This new contract secures the long term future of the elite professional game at international level for an unprecedented term.
"I want to particularly thank the players who engaged in a series of long and detailed meetings over the past eight months to ensure we reached an amicable agreement which recognises the needs of all the parties involved.
"I was extremely keen to lock down a long term agreement so that the players can focus all their attention and energy on what they do best - playing rugby for Wales in the years to come.
"They are proud men and I entered this negotiation determined to recognise the talent, commitment and endeavour they devote to being selected to play for their country.
"The structure of the contract is based on rewarding success. The more matches they win the better the payments will be.
"This arrangement is good - it shares the spoils of victory fairly.
"This contract also recognises the importance of the WRPA and ensures that organisation has sufficient funds measured against key deliverables to function effectively on behalf of all professional players in Wales.
"Playing for Wales is an honour and a privilege but we and the Welsh rugby public are prepared to recognise that the commitment and determination shown by the squad should be rewarded when success is achieved.
"Playing careers do not last a lifetime so being properly recompensed is vitally important for any athlete who must focus all their efforts and energy on improving their playing skills and delivering results on the field of play in a relatively short space of time."
WRPA Chair and senior Wales international Gethin Jenkins said: "I am pleased we have been able to secure a contract which is fair to the WRU and the players.
"It has been a rigorous process of negotiation but it has been worth it to achieve a good deal for everyone involved.
"We would like to thank Roger Lewis for the way he has helped these important negotiations reach an amicable conclusion which benefits all the parties involved.
"The players enjoy an extremely good relationship with the WRU and the signing of this contract at this time means the squad can focus on the rugby unhindered for the next five years."
Wales captain, Matthew Rees said: "I am delighted this contract takes us through to 2016 because it removes any concerns the current and future players will have and allows us to concentrate on matters on the field without any distractions off it.
"We are all immensely proud of playing for Wales and maintain high levels of intensity and focus in order to achieve that honour, which is something this new deal continues to recognise.
"Young players can now concentrate on winning their caps and giving their all for their country in the knowledge that the honour of playing for your country is also rewarding in other ways.
"Playing rugby professionally can be a career aspiration as well as a lifelong ambition for us all."
The General Secretary of the WRPA, Mr Neil Maclean-Smith, said: "I am delighted this important negotiation has now been successfully concluded and the payment structure for Wales' international players is secured for the next five years.
"The WRPA will continue to work hard on their behalf and we will remain committed to ensuring their needs are fully recognised across the many demands they face as elite, professional athletes.
"I would like to thank our chair, Gethin Jenkins, Wales captain, Mathew Rees and the other senior players who have added their expertise to the process which led to the conclusion of this negotiation."