All social care workers will get a cash bonus of £500 each, First Minister Mark Drakeford has announced.
The payments will be made to more than 64,000 workers, at a cost of £32.2m.
Deaths with coronavirus in Welsh care homes continue to rise - there were 184 such deaths by 17 April, accounting for 40% of all Covid-19 deaths in Cardiff.
Mr Drakeford said both residential and domiciliary staff were "often accepting a greater degree of risk" and the payment was designed to recognise that.
The first minister said it was a flat-rate payment, and therefore most benefited the lowest paid.
He called on UK government departments not to tax the bonus or to reduce benefits as a result.
On Wednesday, Mr Drakeford said care home workers and residents would only be tested for coronavirus if they were symptomatic, despite the UK government announcing all residents and staff would be tested in England.
"They are undertaking tasks, which involve a high level of intimate personal care, often accepting a greater degree of risk and responsibility," Mr Drakeford said at the Welsh Government's daily briefing on Friday.
"Many of our social care workers are juggling their own personal caring responsibilities with their professional ones.
"I want our social care workforce to know their hard work is both appreciated and recognised.
"This payment is designed to provide some further recognition of the value we attach to everything they are doing to - it recognises this group of people are providing the invisible scaffolding of services, which support both our NHS and our wider society."
Further details, including when the payment will be made, were still being worked out, the Welsh Government said.
The Unison union in Wales welcomed Mr Drakeford's announcement, and reiterated its calls for a higher pay for care workers.
Their work "should be valued much more highly by society", according to Dominic MacAskill, its head of local government in Wales.
"It can't be right that many care workers, particularly in the private or non-profit sector, suffer in-work poverty because of very low wages and precarious contracts," he said.
"That's why Unison believes all care workers should earn at least £10 per hour to lift them and their families out of poverty."