Education Secretary Michael Russell told MSPs Scottish universities are to be allowed to charge students from England, Wales and Northern Ireland tuition fees of up to £9,000.
Mr Russell said he will allow universities to increase fees from the current rate of £1,820 per year for students from the UK during his ministerial statement on 29 June 2011.
He said: "Scottish universities must remain the best option and not the cheapest option."
The Scottish government will continue to pay fees for Scottish students who study in Scotland and will be obliged under EU law to offer the same subsidy to students from European countries outside the UK.
Scottish Labour's education spokesperson Ken Macintosh said the plan would create: "the ludicrous position of setting higher fees for students in Scotland than England".
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