NUS Wales President Becky Ricketts welcomed the decision that will see students assessed by teachers that know them, rather than an algorithm.
"This decision is good news for the thousands of students who have been unfairly disadvantaged. We appreciate the difficulty that the Welsh Government found itself in, but students are not the ones who should suffer.
"Unfortunately, many students may now have missed out on spaces at universities, and we encourage the Welsh Government to do as much as it can to support students and universities get through this difficult period.
"We hope the lessons from this have been learnt, and that we will see changes to create a more equal education system in Wales. Too much of our education system still fails to support students from the least affluent and most discriminated against backgrounds. Replacing the failures of society with a failure of an algorithm shows how far we have to go."