A £90m windfall for local authorities and moves to reform council tax have been pledged by the Scottish Government.
The SNP administration made the budget concessions to secure the backing of the Green Party in an 11th hour deal yesterday afternoon.
In addition to an extra £90m of unringfenced funds, the cap on council tax increases will rise to 4.79% next year and three-year funding settlements for councils will be introduced.
There will be consultation and legislation for councils to introduce tourism taxes, a workplace parking levy and the devolution of non-domestic rates empty property relief.
The Government will also hold cross-party talks on replacing council tax, with the aim of passing legislation in the next Parliament.
Finance secretary Derek Mackay said: ‘The Scottish Government has continued to ensure our partners in local government receive a fair funding settlement despite further cuts to the Scottish budget from the UK Government.
'These additional measures will deliver the most significant empowerment of local authorities since devolution and provide additional funding to support local services.’
Green votes have been instrumental in passing budgets in the past for the minority SNP Government.
Following an impasse in talks earlier this week, a deal was struck just minutes before this afternoon’s debate and crucial first round of voting on the budget.
Scottish Greens co-convener Patrick Harvie said: ‘It's welcome that after consistent Green pressure the SNP Government has seen sense and committed to immediate action and longer-term reform.
‘Scottish Greens will always be firm but constructive in these situations.'
The Convention of Scottish Local Authorities (COSLA) had warned of a £192m deficit under the previous budget proposals.
President, Cllr Alison Evison, said: ‘Whilst challenges still remain, and today’s movement from Scottish Government clearly doesn’t mitigate all of our funding issues, we are now in a better place than we were with the original budget proposal.
‘I welcome the commitment today to the introduction of discretionary taxation (Transient Visitor Tax) and the Workplace Parking Levy – it is right that Local Authorities across Scotland should be able to raise revenue locally to address local issues.
‘A key part of COSLA’s work is to promote the democratic role and rights of our Councils. Therefore, I appreciate the movement from Scottish Government today, with support from the Greens.’