About 240 members of the Amalgamated Transit Union Local 588 will receive a 2.75 per cent wage increase in 2013, a further 2.75 per cent in 2014 and a three per cent increase in 2015.
The 2013 raise is retroactive to Jan. 1.
Transit employees with more than five years of experience will receive an additional 20-cent-an-hour increase.
The total cost to the city for wages, benefits and long-service recognition is about $1.3 million.
The union had threatened to shut down transit before the Grey Cup game on Nov. 24, but a tentative deal was reached before then.