Toulon lifted the last Champions Cup final at Cardiff in 2014
Cardiff will host the 2025 Investec Champions Cup and Challenge Cup finals for the first time in 11 years.
The Welsh capital beat competition from 23 stadiums across 12 countries to win the right to stage the finals.
Next season marks the 30th staging of the European Cup, which culminated in Cardiff hosting the inaugural final in 1996 – and the following one in 1997.
Tournament organisers EPCR have also confirmed San Mames Stadium in Bilbao, Spain, will host the 2026 finals.
Dominic McKay, EPCR chair, said: “In returning to Cardiff 30 years on from the iconic first final means a great to deal to us and our friends here in the city, and we will celebrate the milestone appropriately.
“We know this rugby heartland will not only be proud to host this historic weekend, but will welcome rugby fans from across the world.”
Cardiff has previously hosted the final seven times, including the first two at the former National Stadium.
The Principality Stadium has since staged the Champions Cup finals on five occasions, though not since Johnny Wilkinson lifted the trophy with Toulon in 2014.
Welsh Rugby Union chief executive Abi Tierney said: “We are thrilled that Principality Stadium has been chosen to host the ultimate competition in European club rugby, in the year we celebrate 25 years of our magnificent stadium.”
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Staging the final in 2014 generated £24 million for the city, Cardiff council said.
Bilbao became the first city outside of European rugby’s top six nations to host the European finals in 2018 when Leinster lifted the Champions Cup and Cardiff won the Challenge Cup.
McKay said: “Our selection of host cities such as this reflects our intention to continually deliver outstanding experiences for fans, clubs and stakeholders for our marquee weekend.
“We know Bilbao will attract spectators from a varied demographic, bringing our sport to even more fans in a stunning host city.”
The 53,000-seater home of Athletic Bilbao football club was awarded the Best Sports Building in the World accolade in 2015 by the World Architecture Festival and will also host this season’s Uefa Women’s Champions League final and the 2025 Uefa Europa League final.