More than 900 drivers will have speeding fines refunded and convictions quashed after it emerged part of a road signposted as 30mph had a 60mph limit.
The necessary order was never passed to make the limit lawful
Mid and South Wales Safety Camera Partnership reviewed a camera site at Primrose Hill in Cowbridge.
It is now writing to 949 motorists telling them how to reclaim fines and have points removed from their licence.
It emerged that the traffic regulation order needed to change a speed limit was never passed at the site.
The partnership said that in 1990, the former South Glamorgan County Council extended the 30mph on Cardiff Road in Cowbridge limit 260 metres to Primrose Hill and signposted it.
But the partnership said it had now found that the necessary traffic regulation order was never passed to make the new speed limit lawful and the limit on the Primrose Hill section should have remained 60mph.
A mobile camera operated at Primrose Hill between April 2000 and May 2005, during which time 949 motorists accepted fixed penalties or were summoned to appear in court.
All the affected motorists will have their convictions reversed and their fines refunded.
Phil Davies, manager of Mid and South Wales Safety Camera Partnership, said: "We are determined to resolve this situation as quickly and fairly as possible. "We feel it is only right that we reverse all the convictions.
"We stopped enforcing here as soon as we realised there may be a problem and I have asked all local authorities within mid and south Wales to review their traffic regulation orders."
He added: "We will be refunding all those that have been prosecuted in that area since the partnership started in 2000.
"It's embarrassing and we are concerned it has arisen.
"We are grateful a member of the public has drawn our attention to it."
Motorist John Davies, who complained about the speed signs, told BBC Radio Wales that he was pleased with the outcome.
He added: "I'm very very pleased that justice has been done.
"Rather than pay the £40, I paid a couple of hundred pounds on research and fees to make it correct."
Vale of Glamorgan council has now put a traffic regulation order in place and the entire section has a legal 30mph speed limit.