The 4% award plus expenses is in line with the uplift recommended by the independent Doctors and Dentists Review Body (DDRB) earlier this year, whose recommendations the Welsh government has accepted in full.
Pay for all GPs will rise 2% - with this increase applied to salaried GPs, the trainers grant and the rate for GP appraisers - while partners have been awarded an additional 2% on top.
Doctors' leaders in Wales said the award showed that the Labour government in Wales 'understands the value of doctors' - and contrasted it to the 'different path' taken by the Conservative government in England.
Welsh health secretary Vaughan Gething said: 'I am pleased to announce today that I have been able to implement the recommendations of the DDRB in full.
'This pay rise, which will be backdated to 1 April 2018, recognises the value and dedication of hardworking doctors and dentists and their key contribution to the NHS in Wales. This deal goes beyond what was agreed for doctors and dentists over the border and is yet another reason why Wales is a great place to train, work and live.'
Mr Gething added: 'Following years of austerity, imposed by the UK government, we have committed additional funding to fulfil the DDRB recommendations. The reality remains, however, that our budgets are limited and so meeting a pay deal resulting from the lifting of the UK government’s pay cap without appropriate funding to follow presents a risk to the future funding of NHS Wales.'
BMA Wales chair Dr David Bailey said: 'Whilst the DDRB's recommendations could have gone further to address many years of below-inflation rises, doctors in Wales will be pleased that the Welsh government has decided to implement the recommendations made by the independent panel.
'At a time when the NHS is facing severe staff shortages across the UK, and doctors are having to manage unprecedented levels of demand, this announcement and the decision to backdate the pay award to April 2018, shows that the Welsh Government understands the value of doctors who are working tirelessly to improve and maintain the health of the people of Wales.
'By following a different path to that taken in England the cabinet secretary has again shown that concrete steps are being taken to ensure Wales is an attractive place for doctors to work and will go some way towards addressing the recruitment and retention challenges we are facing.'
Mr Gething welcomed assurances from BMA Wales that it would work with the government to deliver plans to boost the long-term sustainability of the workforce and to develop the primary care model in Wales.