The bursary, added to an existing scheme offered to trainee midwives and nurses, will be paid over 12 months each academic year.
Around 700 students will be eligible from September, with the number expected to rise to 900 the following year.
The Pay Student Paramedics campaign, run by over 250 students at all Scottish universities offering paramedic courses, said the bursary will make a “gigantic” difference.
The move has been welcomed by Scottish Labour and the Liberal Democrats.
Pay Student Paramedics campaigner Rory Maclean said: “After a year of campaigning we have won the bursary for student paramedics in Scotland. The difference this will make to the lives of hundreds is gigantic. The pressures of food poverty, worrying about rent and mental health will all be eased.
“This bursary was won because student paramedics came together to fight against an obvious injustice. Our reports over the past year have shown the financial and mental strain completing this course without a bursary takes. We are glad the government has listened and put in place the measures we have been asking for.”
Health Secretary Humza Yousaf announced the payment on Thursday at an ambulance station in Dundee.
"Paramedics have been a driving force in maintaining NHS services throughout the Covid-19 pandemic and I am determined to ensure we attract and support the next generation of these vital workers,” he said.
Pauline Howie, Chief Executive of the Scottish Ambulance Service, said: “This is fantastic news for current and prospective students across the country. They are an important part of our workforce and this announcement will be a real boost which will help encourage the paramedics of the future.”
Liberal Democrat MSP Liam McArthur said: “Student paramedics will breathe a sigh of relief when they hear that a bursary will be in place for the new term start. Given the government’s initial reluctance, it’s welcome that they’ve changed their tune.
“I was proud to lead the calls for this in the Scottish Parliament, but this win is the result of determined campaigning efforts by the students themselves.”