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A new body called Qualification Wales will award and regulate exams signalling big changes.

It will not only end the education minister's role in regulation but put a question mark over the WJEC's future.

The announcement on Wednesday followed a review of the qualifications taken by teenagers.

Welsh education minister Leighton Andrews was criticised when he used his powers as a regulator to order re-grade some GCSE papers.

He said he was forced to act because Welsh students had been the victims of an "injustice".

A review into qualifications for 14-19-year-olds last month said Wales should retain GCSEs after they are phased out in England.

It is also said a new body should regulate qualifications at arm's length from the Welsh government.

The review's author, Huw Evans, will start work on setting up Qualifications Wales next year.

A detailed business case will be prepared in the first half of 2013.

Mr Andrews said a similar model of running qualifications had worked well in Scotland.

"We are clear as a government that this is the right way forward for us," he said.

"Considerable thought will be given to the governance, remit, structure and operation of Qualifications Wales."

He said the decision will have "implications" for the WJEC exam board which sets most of the exams sat by teenagers in Wales.

Discussions are underway with the board and with local councils, he said. The WJEC will continue to provide qualifications "as these discussions progress".

A spokesperson for the WJEC said: "Our view is that this body also needs to be independent of awarding organisations, especially as it manages the risks associated with the ambitious qualifications development agenda set out by the Review of 14-19 Qualifications."

In England exams are regulated by Ofqual.

UK Education Secretary Michael Gove refused to intervene in the row over GCSE English and accused Mr Andrews of being "irresponsible".

Mr Andrews has previously defended the system that he is now effectively scrapping, telling AMs in September that there were "significant benefits to having ministerial involvement in regulation".

He said ministers only got involved in the most important decisions and the GCSE English row was an "exceptional case, on which we were able to respond quickly and decisively to correct an injustice to learners in Wales".

Welsh Conservatives have previously complained about Mr Andrews "interfering" in exams and called for an independent regulator.

Conservative education spokeswoman Angela Burns welcomed the "U-turn", adding: "This is an embarrassing climb-down for the education minister but should ensure that this summer's debacle over the GCSE English language regrade will not be repeated."

Plaid Cymru said the party had been calling for a single body to regulate qualifications in Wales.

Education spokesman Simon Thomas AM added that Plaid opposed the marketisation of education with competing qualification providers.

"Schools under increasing pressure due to the banding system, often opt for qualifications which are easier to pass rather than qualifications which build and test young people's knowledge and skills," he said. "We need exams that prepare our young people for the labour market or further and higher education."

NUT Cymru secretary David Evans said: "Hopefully this will provide an independent quality assurance for qualifications in Wales."