SEAT has become the "official car suppliers to the WRU", which means their vehicles will be driven by team management, professional referees, Millennium Stadium plc and Dragons Rugby Trust (DRT) staff.
The sponsorship deal is the third new commercial deal announced by the union this season, with SEAT adding their brand name to Rockport and Specsavers.
The company will give the union in excess of 50 cars per annum to use to promote the game from the lowest level all the way through to the national set up.
And both parties have ensured the Union's grass roots rugby scheme is the main beneficiary of the deal. It will receive over 50 per cent of the SEAT Leon TDI (sporty hatchback), Alhambra (seven seater) and Toledo (luxury saloon) cars.
"The provision of a large number of vehicles for the WRU's youth programme (DRT) fits well with our own brand values of sportiness, enjoyment and youthful appeal," said SEAT UK head of marketing Mark McKenna.
"Perhaps most importantly the deal allows the WRU to extend their work in this field considerably, reaching more young people than ever."
The deal is worth well over seven figures in terms of the value to rugby in Wales and WRU chairman Glanmor Griffiths hopes this is the beginning of a long and successful relationship.
"Whether it is to transport members of the first team squad or take our development officers to the far reaching rugby outposts of Wales, we are confident SEAT has the expertise to ensure everyone gets to the right place at the right time," said Mr Griffiths.
"Mobility is the essence of the modern game of rugby and it is apt that we have entered into this partnership with a company that is at the cutting edge of development in the motor industry."
This new deal marks the second year of SEAT's status as WRU car supplier and was sealed after a very successful and mutually beneficial provisional year-long partnership.
"Close association with Wales' national sport and the Millennium Stadium has already done a great deal to raise SEAT's profile and reinforce our market position as a modern, sporting brand," added Mr McKenna.
This deal follows hot on the heals of the announcement that Welsh rugby is set for a huge cash boost
During the hosting negotiations for the 1999 Rugby World Cup, Glanmor Griffiths secured a deal that ensures the WRU will get 20 per cent of the gate-taking profits if England or France win the 2007 Rugby World Cup bid.
Mr. Griffiths said, "We will receive 20 per cent of the overall profit from 2007 tournament gate-takings no matter which country it is held in.
"That financial agreement exists with England and France whether or not Wales play their games in Wales.
"But it does not make sense for England to ignore the Millennium Stadium as a venue. The Football Association and Football League don't ignore it and neither are the Rugby Football League."
Cardiff is closer to London than some of England's proposed soccer stadium venues in Leeds, Newcastle, Manchester and Liverpool, and has proved itself more than capable of hosting premier sporting events.