Extra money for health, colleges, councils and the Welsh language has been promised after Plaid Cymru agreed a £119m deal to back Labour’s budget.
With no majority, the Welsh Government needs some opposition support to get spending plans of around £15bn passed.
Finance Secretary Mark Drakeford said the agreement gave a “kick start” to key priorities, as he prepared to give AMs more details on Tuesday.
The Tories claimed the deal proved they were now the “real opposition”.
Budget talks took place under the post-election deal by which Plaid agreed to support Carwyn Jones’s return as first minister.
The extra money for health includes cash to boost medical training, mental health and new diagnostic equipment.
Nominal cuts planned for local councils – who shared a 2% budget reduction last year – have been cancelled, Plaid Cymru said.
Other measures include a feasibility study into reopening the Carmarthen-Aberystwyth rail line and quicker action on building a by-pass for Llandeilo, Carmarthenshire.
Mr Drakeford hailed the budget talks as “a milestone in the maturity of Welsh politics”.
“No party has a monopoly on good ideas and we have been able to incorporate many of Plaid Cymru’s spending plans into this draft budget,” he said.
“The budget agreement delivers a kick start to delivery for many key policies and programmes, so the people of Wales can start to see their benefits as early as possible.”
Plaid finance spokesman Adam Price said that his party had used its role as official opposition to deliver “tangible benefits” for the people of Wales.
“In this budget deal, we have secured the biggest one-year budget settlement in the history of the National Assembly,” he said.
“This is a £119m package that will deliver and progress many of Plaid Cymru’s manifesto commitments.”
However, Welsh Conservative leader Andrew RT Davies dismissed the deal as “groundhog day again”.
“The nationalists are rowing in behind Labour and propping them up for another 12 months of failure,” he told the BBC’s Good Morning Wales radio programme.
“It is regrettable that not more of a challenge is put forward against the Welsh Labour government here.”
Confirming on Monday that a deal had been done, Plaid Cymru leader Leanne Wood said it showed how the party was being constructive in its opposition to Labour, following criticism by Lord Elis-Thomas over the party’s stance towards the government.
The Dwyfor Meirionnydd AM quit Plaid Cymru on Friday, claiming the party was not “serious” about working with Labour.
Analysis by BBC Wales political editor Nick Servini
It appears to be all sweetness and light between Labour and Plaid Cymru as the Finance Secretary Mark Drakeford has grandly described their joint working on the budget as a “milestone in the maturity of Welsh politics”.
A joint statement has been released largely outlining Plaid’s policy priorities worth £119m, which will be celebrated as wins for the party as it heads to Llangollen for its annual conference on the weekend.
Interestingly, Plaid’s Adam Price says nominal cuts to Welsh councils for next year will be cancelled.
Local authorities have played second fiddle to the NHS in recent years, but with council elections next spring, there has been some heavy lobbying from town hall leaders looking for a better deal before they put themselves up for re-election.
Welsh budget: Labour and Plaid Cymru agree £119m deal}