Wales will be given the power to make decisions on fracking and a wide range of other energy projects under a devolution package unveiled by David Cameron and Nick Clegg.
That means Welsh ministers could go ahead with the moratorium on fracking, which it announced last month.
Making the announcement at Cardiff’s Millennium Stadium, the Prime Minister said plans to give the extra powers are a “clearer, stronger, fairer” deal.
Other recommendations under the so-called St. David’s Day Agreement include projects up to 350MW, responsibility for issuing marine licences and powers over sewerage to be decided by Welsh ministers.
Mr Cameron added the agreement represents “one of the biggest transfers of power in the history of Welsh devolution”.
He said: “ It means more decisions taken here in Wales and more opportunity for the Welsh people to hold their politicians to account. And it means those who spend taxpayers’ money must also be more responsible for raising it.
“I hope the next great debate is not about which powers should rest where but instead about how these powers are used for the people of Wales.”
The Welsh Assembly will also get the power to rename itself, control its size and decide some matters related to elections.
Ministers in Wales will have to agree on the plans before a referendum can go ahead.
Welsh First Minister Carwyn Jones said there is “some welcome progress on certain areas”.
He added: “Credit is due to those, from all parties, who have worked to get something tangible out of this rushed and unsatisfactory process. However, Wales is still not being treated with the same respect as that being afforded to Scotland and this continuing imbalanced approach is damaging to the UK.
“The proposals only go some of the way to matching Labour’s devolution offer already set out by Ed Miliband but they fall short in crucial areas – such as on policing.”