It marks a move in a different direction for the NCAA and its view of student-athletes, whom the organization sees as amateurs.
Tuesday's announcement is just a first step, and it remains to be seen how players will benefit from the change and what the specifics of the new rules will be.
Many people saw the news as a positive, including one NBA superstar, who skipped playing in college.
LeBron James tweeted it was a "beautiful day."
"Thank you guys for allowing me to bring more light to it. I'm so proud of the team at @uninterrupted bringing focus on this and to everyone who has been fighting this fight. Not a victory but a start!" he wrote.
James' partner at Uninterrupted, which calls itself an athlete empowerment brand, Maverick Carter was also taking a wait-and-see approach while applauding the NCAA.
"Today's decision by the NCAA is a big step forward, but there's a lot more that needs to be done," he said. "We're looking forward to continuing that work alongside anyone who believes, as we do, that the athletes deserve to benefit from their talent and hard work."
Former Olympic skier Jeremy Bloom, who in the 2000s fought the NCAA for the right to continue to play football for the Colorado Buffaloes, was "highly skeptical" of the governing body.
He pointed in a tweet to the NCAA's language in their news release.
It mentions athletes could be allowed to benefit "in a manner that is consistent to the collegiate model."
"What in the world does that mean?" said Bloom, who was ruled ineligible for his final two football seasons because he took endorsement money for skiing. "Bottom line, state legislators need to continue to down the path and keep the pressure high while the NCAA figures out how to hold up their house of cards."
Bloom titled his statement: "Don't buy the NCAA hype."
Nancy Skinner, a state senator who was the co-sponsor of California's Fair Pay to Play Act, lauded what she saw as the state's role in the NCAA's decision.
"California's leadership is a game-changer once again! The NCAA's announcement shows promise on giving college athletes' NIL rights. But the devil is in the details on what the NCAA means by adhering to the 'collegiate model,'" she tweeted.
A top legislator in Florida, one of the other states considering legislation on college athletes and possible payments, said he was pleased with the NCAA decision but he still plans to pursue a new law.
"While this is a great first step, we must ensure Florida's student-athletes are provided fair treatment and long-term protections found in my bill, HB 251," said Kionne L. McGhee, the leader of the state's Democratic representatives.
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