Three rounds of matches will be played in the four-team group stages at club grounds before a double header semi-final at the Millennium Stadium on the weekend of 4th-5th March 2006 and the final at Twickenham Stadium on the weekend of April 8th-9th.
The BBC has committed to show at least four matches from the group stages across its network and both semi-finals and the final.
Powergen have agreed a deal to sponsor the competition in a partnership with the Rugby Football Union, the Welsh Rugby Union and Premier Rugby Ltd.
WRU Chief Executive Steven Lewis said: "The great thing about this tournament is that it will rekindle traditional rivalries between the teams and supporters from both countries which will certainly bring an extra buzz and edge to the games. There is already a great deal of anticipation for the competition here in Wales."
RFU Chief Executive Francis Baron said: "This agreement is a step forward for both unions and their clubs and regions. With the semi-finals at the Millennium Stadium and a final at Twickenham to look forward to, this is an exciting new development for this historic tournament."
RFU Commercial Director Paul Vaughan said: "The deal is an excellent one for all the parties involved. The entry of the four Welsh regions to the Powergen Cup will add extra interest to the competition.
"The Powergen Cup has a long history spread over 30 years and while we wanted to make some changes to it to maximise interest, revenue and attendances, it was essential that the basic criteria of a knockout competition remained."
Premier Rugby Commercial Director Jon Varney said: "We are delighted that all parties have confirmed their involvement in the new Powergen Cup. The tournament is an exciting one and we look forward to renewing traditional rivalries between the elite clubs in England and the Welsh regions.
"The new Powergen Cup is far stronger commercially and this will benefit not only our clubs and the Welsh regions, but also the Rugby Football Union and the clubs below Guinness Premiership level who will receive a considerably larger contribution from the improved competition structure.
"In addition, the Powergen Cup gives us an additional terrestrial platform for our clubs and the game in general via matches on BBC Grandstand, BBC Wales and S4C."
Powergen's Head of Brand Strategy and Communications Helen Kerr said: "Powergen is delighted to be extending its support of rugby union for the 2005/6 season. The introduction of the Welsh regional teams will inject further interest and marks an exciting new era in the history of the tournament.
BBC Head of Rugby Philip Bernie said: "The BBC is delighted to have this exciting competition on both Grandstand and BBC Wales. The new look Powergen Cup promises to bring some excellent contests to our screens, and we look forward to showcasing the best rugby talent in England and Wales."
Powergen Cup Groups
Powergen Cup Fixtures
Powergen Cup Round 1: Sep 30-Oct 02
Saturday Oct 01
Gloucester v Ospreys (1430) BBC1 Network (Grandstand)
Bath v Bristol TBC
Saturday Oct 01
Blues v Saracens (1730) S4C
London Irish v London Wasps TBC
Sunday Oct 02
Leeds Tykes v Scarlets (1700) BBC Wales
Newcastle Falcons v Sale Sharks TBC
Friday Sept 30
Dragons v Leicester (1910) BBC Wales
Worcester Warriors v Northampton Saints TBC
Powergen Cup Round 2: Oct 07-09
Sunday Oct 09
Ospreys v Bath (1635) S4C
Bristol v Gloucester TBC
Friday Oct 07
London Wasps v Blues (1940) BBC Wales
Saracens v London Irish TBC
Sunday Oct 09
Scarlets v Newcastle (1430) BBC2 Network (Grandstand)
Sale Sharks v Leeds Tykes TBC
Saturday Oct 08
Northampton Saints v Dragons (1800) S4C
Leicester Tigers v Worcester Warriors TBC
Powergen Cup Round 3: December 02-04
Bath v Gloucester
Bristol v Ospreys
London Irish v Blues
London Wasps v Saracens
Leeds Tykes v Newcastle Falcons
Scarlets v Sale Sharks
Dragons v Worcester Warriors
Leicester Tigers v Northampton Saints
Powergen Cup Semi-finals
March 4th or 5th Millennium Stadium
Powergen Cup Final
April 8th or 9th Twickenham Stadium