In a statement to the Scottish Parliament, the education secretary confirmed that it would accept many of the recommendations outlined in the Priestley report published today.
Mr Swinney announced that National 5 exams will be awarded on the basis of centre estimation, similar to those submitted by teachers this year, based upon validated assessments.
He added that Higher and Advanced Higher examinations in 2021 will go ahead as planned, but will start from 13 May next year, later than normal, to allow for more teaching to be done to make up for some of the teaching time lost at the end of 2019/20.
Mr Swinney told MSPs that a full exam diet was a risk “too big to take” and would not be fair to pupils and insisted that no algorithm would be used to change or moderate final grades.
He said the cancellation of National 5s would free up teaching capacity in schools to allow for Higher and Advanced Higher exam to take place, with the decision to run those exams based on the fact they are most often used to get access to universities.
Those exams will only be cancelled if public health advice requires it, with contingency plans being developed by the Scottish Government.
It comes after the Scottish Government and the SQA received damning criticism into the 2020 exam results scandal in the review report authored by Professor Mark Priestley.
Within the report’s main findings included “widespread criticism” of the SQA for a “perceived lack of transparency”, with the impact of an “over-reliance on a statistical approach” on disadvantaged or poorer students “under-emphasised” by the Scottish Government and the SQA.
The SQA was also criticised for missing and dismissing opportunities to engage in qualitative moderation of the algorithmic moderation policy, and for an “erosion in trust” in the qualifications authority amongst teachers and pupils.
Speaking in Holyrood, the deputy first minister said: “Given the real risk of further disruption to education, it would not be sensible or fair to plan for a full exam diet in 2021. Coronavirus has not gone away. If anything, it is making a comeback.
“In a normal exam year, National 5s constitute more than half of all exams taken. From a public health point of view, not running these exams significantly reduces risk.
"National 5 pupils will receive awards based on their course work and the judgement of their teachers, with robust quality assurance. We have learned lessons from this year’s initial SQA gradings - there will be no algorithm for moderating grades in 2021.
“By replacing National 5 exams, we can hold an exam diet for Highers and Advanced Highers if public health guidance allows – these are the qualifications most pupils leave schools with that determine paths into work, college, or university.
“None of us can predict the coming weeks and months, so clear contingency plans are being developed should, for public health reasons, the exams have to be replaced.
"In those circumstances and only if necessary, we will award Higher and Advanced Higher grades based on teacher judgement, supported by SQA quality assurance, taking account of assessment evidence.”
Mr Swinney also announced that all of the recommendations within the report into this year’s exam result fiasco would be accepted or considered for future research.
Among the recommendations include the development of a new system of moderation for teacher estimates, which Mr Swinney said would include coursework and the introduction of “quality assurance” support from the SQA.
The Scottish Government has also committed to work better with teachers and pupils, alongside clear communications around 2021 exams.
Mr Swinney said: “My decisions on the 2021 exam diet were informed by Professor Priestley’s recommendations, widespread consultation by the SQA on the exams timetable and course assessment modifications, and by listening to the views of pupils, teachers, parents, education experts, local authorities and other stakeholders.”
The Scottish Conservative’s education spokesman Jamie Greene said: “By cancelling the National 5 exams, the education secretary has thrown in the towel.
“Today’s statement gave some clarity, but months into the academic year, it was far too late in coming for our teachers and young people.”
He added: “Serious questions remain for John Swinney on how National 5 grades will be awarded and what contingency plans will be in place for Highers and Advanced Highers if exams cannot proceed.
“Confidence in him is already rock bottom, and today’s announcement raises more questions than answers.
“If John Swinney doesn’t set out these details now, then he runs the real risk of repeating his disastrous mistakes from this year.”
Scottish Labour’s education spokesman Iain Gray highlighted an email in the Priestley report, which states Mr Swinney wanted work to be done to show poorer children had not been disadvantaged with the initial moderation.
He said: “This damning email shows the lengths to which the Deputy First Minister went to save his political career.
“This email makes it clear that when John Swinney realised what he had done, his first instinct was to spin his way out of trouble even as thousands of young people were suffering.
“The second most senior member of the Scottish Government should not be using his power to pressure civil servants into providing ammunition for his discredited narrative.
“John Swinney should have spent the days following the grades fiasco apologising to students and making amends. Instead it has been revealed that not only did he spend this time spinning a narrative to save his neck, he pressured others to help do so.”