The 2021 higher and advanced higher exams diet has been cancelled, John Swinney has confirmed.
The deputy first minister and education secretary says pupils will be judged on their coursework instead.
It will follow a similar system to the one eventually used to mark pupils grades earlier this year - following controversy over the initial system used by the SQA.
Mr Swinney told parliament that data shows that since the return to school in August, there have been varied instances of Covid-related disruption to learning, with a higher proportion of pupils from more deprived areas having to spend time out of school.
He said: “In October, I said highers and advanced highers would go ahead if it was safe and fair to do so. Since then, many pupils have suffered disruption because of Covid, as they were obliged to self-isolate or even saw their school closed. The level of disruption has, however, not been the same across the board – pupils in deprived areas have been hit hardest.
"While we hope that public health will improve in the coming months with the roll-out of the vaccine, we cannot guarantee that there will be no further disruption to pupils’ learning.
"Holding exams would run the risk of translating the unequal impact of Covid into unfair results for our poorest pupils, leading to their futures being blighted through no fault of their own. That is simply not fair.
"There will be no higher or advanced Hhigher exams in 2021. Instead we will adopt a new model that is based on the one developed for national five qualifications and make awards on teacher judgement of evidence of learner attainment. This approach is more flexible and takes account of the reality of the disruption so many pupils have already had to their learning.”
Mr Swinney also announced there will be an exceptional one-off payment to teachers and lecturers who are critical to assessing and marking national five, higher and advanced higher courses this year, to recognise their additional workload.
Meanwhile arrangements for students returning to universities after Christmas have been confirmed.
With limited exceptions, undergraduates have been told they should initially plan to restart their studies at home, and only return to campuses and term-time accommodation when notified to do so by their universities.
When students return to term-time accommodation, they will be offered lateral flow Covid-19 testing, similar to that offered ahead of Christmas. All students are being asked to restrict their social interaction for a fortnight before they return to university and for the same period after they get there.
College students - who largely do not move away from home to go to education - have been told they should return as planned, in line with the protection level for the area their college is in at that time.
Further and Higher Education Minister Richard Lochhead said: "The Scottish Government, our colleges and our universities have a shared priority to ensure transmission of the coronavirus is minimised for the safety of all in our community.
"We also wish to see students have a positive educational experience in the coming spring term, including a blend of digital and in-person provision.
"The spread of the virus is, however, uncertain and prevalence is stubbornly high in some areas. So we are proposing these arrangements for the forthcoming term to ensure a safe return to college and university for students, staff and wider communities, building on the positive work done by colleges and universities based on the experience of the first term."