Health Minister Margaret MacDiarmid won't say what the increase is worth, but she says the agreement offers solutions that benefit the health system, including the addition of new nurses.
The agreement was reached under the government's co-operative gains mandate, which is an effort to get both sides looking at ways of saving money which can then go towards wage increases.
Taxpayers aren't on the hook and services aren't reduced.
The deal, which must yet be ratified, is a bright patch in a rocky set of public sector negotiations which have seen one-day strikes and other job action.
Earlier this month, Finance Minister Mike de Jong announced that a round of restraint is on its way, in part because dropping natural gas prices have cost the government $1.1 billion in revenue.
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