The AFL 'soft' salary cap will increase by $700,000 by the 2027 season, while the AFLW equivalent will lift by $300,000 amid a raft of changes to the policy.
Clubs and coaches have long agitated to lift the soft caps after a series of cuts during the COVID-affected 2020 season.
The league announced the changes, which will gradually take place between 2025 and 2027, late on Tuesday afternoon.
The AFL cap will increase by $400,000 to $7.675 million in 2025, then by an additional $250,000 in both 2026 and 2027, to ultimately reach $8.175 million.
The AFLW cap will increase by $100,000 to $1.175 million next year, with further increases of $100,000 in each of 2026 and 2027, to ultimately reach $1.375 million.
The AFL estimated in 2025, club expenditure in their football programs across AFL and AFLW would be in the range of $11-$11.5 million.
Clubs are already able to pay 20 per cent of their AFL senior coach's salary outside the soft cap, as of this year, and that will now also apply to their AFLW equivalents.
Clubs can also claim an additional $25,000 deduction from the cap for professional development in AFLW programs.
AFL and AFLW clubs that are required to travel from interstate to Victoria for the respective grand finals can claim an additional $50,000 deduction, while clubs' finals allowances have been lifted.
The league's healthcare model has been adjusted to expand expenditure capacity for key resources, including doctors, psychologists, allied health professionals and an Indigenous player development manager.
"Following extensive consultation with clubs, and particularly coaches, other stakeholders and the AFL commission, we are pleased to confirm the soft cap policy for three years, providing clubs with planning certainty over the remainder of the current collective bargaining agreement, which goes through to the end of the 2027 seasons," chief executive Andrew Dillon said.
"We have continued to talk to coaches and football departments and are also pleased to be able to bring in an AFLW senior coach deduction to now align with the 20 per cent AFL coaches deduction announced last year.
"As part of a commitment to continue to prioritise player health and safety we have revised the soft cap healthcare model to ensure minimum standards in healthcare resourcing are set across the competition and ensure equitable access to healthcare providers across both AFL and AFLW programs."
In a statement, the AFL Coaches Association welcomed the announcement, describing them as a "clear starting point".
"It is crucial to the health of the game that the coaching profession keeps pace with the rest of the industry and continues to advance following the commencement of the new broadcast agreement and finalisation of the players' CBA last year," the AFLCA said.
"In regard to the AFLW soft cap, the AFLCA is pleased to see the 20 per cent senior coach deduction from the soft cap, as well as an added focus on professional development for AFLW coaches which will help to further promote the profession to our coaching cohort.
"Overall, our membership believes that coaches should be properly rewarded for the value they bring, and the football industry needs to continue looking at ways to make the profession as attractive as possible."
AAP/ABC
