The NSW government and the state's rail union struck a deal in the Fair Work Commission late on Friday, with commuters set to be spared further industrial action that has plagued the network for almost a year.
The deal gets the rail workers a 12 per cent pay rise over three years, with back pay also included.
The Rail, Tram and Bus Union had initially sought a 32 per cent pay rise over four years and a 35-hour working week, while the government had offered a 15 per cent figure over the same time frame.
Transport Minister John Graham claimed the result as a win for his government, labelling it a "fair and reasonable" wage rise they had promised to deliver.
"This agreement will bring relief to the disruption from protected industrial action that a million daily rail commuters have been forced to endure while just trying to get to work and get around," he said.
"This process has strained the patience of train passengers ... this much-needed reset allows us to implement improvements for passengers with the full support of the rail workforce and unions."
The government said the deal delivered technological improvements that would boost recovery times when on-track incidents affected the operation of the system.
""For example, train crews will support the introduction of a new digital disruption management system that will end the current practice that relies on a manual system of phone calls and paper-based instructions during recovery from an incident," a government statement read.
After a number of industrial actions forced mass train delays and cancellations, the Fair Work Commission suspended the union from taking any more until July 1 before the agreement was struck on Friday.
Tension between the parties had increasingly grown, with former transport minister Jo Haylen repeatedly likening the RTBU to a boa constrictor for its ability to "strangle" and "squeeze the life out of the network".
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