A new Welsh law has removed local health boards’ duty to break even annually.
The National Health Service Finance (Wales) Act 2014 means that local health boards will have a three-year rolling financial duty, with a “tolerance threshold”.
Minister for Health and Social Services, Mark Drakeford said: "The current expectation on Local Health Boards to balance their books each and every year encourages short term decision-making around the end of the financial year. This prevents a more sustainable approach to service provision.
"The new Act will provide Local Health Boards with greater financial flexibility and help the NHS in Wales to focus its service planning, workforce and financial decisions over a longer and more sustained period."
First Minister Carwyn Jones said: “Through our ambitious five year legislative programme, we are introducing ‘made in Wales’ solutions to the issues affecting us as a nation.
“These Acts represent a further step in our drive to improve public services and make Wales a better place.”