Gigaba, who is facing down ratings agencies concerned about signs of populist-style spending and who faces pressure to cut state expenditure, appealed to Zuma to follow the budget process to make additional funding available for the far-reaching proposal.
It is understood that Zuma worked with Higher Education Minister Hlengiwe Mkhize and her director-general, Gwebinkundla Qonde, on the details of the plan, but has not consulted the Treasury on how additional funding will be made available.
The Treasury said yesterday it had "noted" the announcement and "is in the process of reviewing the details of the higher education proposals, as well as possible financing options".
It said any amendments to existing spending and tax proposals would be announced in the 2018 budget.
Delivering his political report at the elective conference yesterday, Zuma said his announcement for free higher education would be done in a "fiscally sustainable manner".
A defiant Zuma used his last official address as party president to lash out at the judiciary and civil society, accusing them of meddling in ANC matters.
He also sniped at the party's parliamentary caucus, charging that it had been used to wage factional battles, while also agitating for the immediate expulsion of ANC members who took the party to court.
"This morning we announced a plan for fee-free higher education for students from poor and working-class backgrounds, which will be implemented in a fiscally sustainable manner, following the release of the Heher commission of inquiry [report] into higher education," Zuma told ANC delegates, some of whom applauded the announcement.
The plan will require the National Student Financial Aid Scheme to amend its loan allocation process to give grants to poor students. With the education sector now shut down for the year, there is no time for NSFAS or universities to prepare for the 2018 academic year under the new funding plan.
It is understood that Zuma was worried about the outcome of the ANC elective conference, concerned that he faces being recalled from office should Cyril Ramaphosa be elected.