Admiral's Chief Executive and founder, Henry Engelhardt and the Group Chief Executive of the Welsh Rugby Union, Roger Lewis, have announced the new partnership will run from October the 1st 2010.
It means the famous Admiral name will be linked to Welsh rugby when games are watched or broadcast to millions of fans around the world.
The first Welsh rugby jersey's bearing the Admiral logo will be available in stores from this September.
Supporters will get their first opportunity to see the Wales team wearing the new strip against the top nations from the southern hemisphere at the Millennium Stadium in November.
Admiral is developing the new jersey design with the Welsh Rugby Union .The Admiral logo will also appear on the Wales training shirts, shorts, some leisure wear and a range of specially designed children's rugby kit will be launched.
Admiral was launched in 1993 and has grown into one of the UK's most high profile car insurance specialists, boasting 1.9 million customers accounting for some 7 per cent of the UK market. It also has brands in Europe and the United States. It is the only FTSE100 company based in Wales and has been named Welsh Company of the Year three times.
Admiral employs 3,000 people across South Wales and the company's headquarters are in Cardiff, just a short walk from the Millennium Stadium which is the home of Welsh rugby.
Admiral Chief Executive, Henry Engelhardt, said: "This is an incredibly exciting partnership for Admiral. As someone who has come to live in Wales from another country, I have become aware of the iconic status the Welsh national team has with the people of Wales.
"We are proud to be a successful Welsh company, which has taken what it does best to the rest of the world. And we look forward to a successful partnership with the WRU.
"I know our staff throughout Wales will be proud to see the Admiral name emblazoned on the shirts of the Welsh team and will cheer them on at every game."
The Group Chief Executive of the Welsh Rugby Union, Roger Lewis, said: "We are delighted to be forging a new partnership with a brand which rightly enjoys an international reputation for commercial success twinned with being a great employer.
"The story of Admiral is one of enormous success and the Group is a shining example of the kind of what can be achieved on the world stage from within Wales.
"Wales is one of the top nations in world rugby and it is important that we forge commercial relationships with brands that mirror that status.
"We have enjoyed a fantastic relationship with Brains as our shirt sponsors for the past six years and we are delighted that link will remain through the continuing pourage deal at the Millennium Stadium. Now the time is right for Welsh rugby to move into a new sphere twinned with Admiral which takes Wales to the world on the commercial stage just as we do on the field with our rugby.
"The success we enjoy as a rugby nation has created enormous interest in securing the shirt sponsorship deal from major brands and we are fully confident that Admiral will help us build even greater global recognition in future."
Advance retail orders for all WRU Under Armour kit and leisurewear are currently up by 50 per cent on the same period last year.
The Wales jersey bearing the Admiral logo will be worn by players for up to 13 international matches every year during the period of the contracted partnership.