The deal between the province and the union, which represents 43,000 teachers, was signed Thursday morning after talks went around the clock the previous day.
It's the first teachers' group to break ranks with other unions, who have refused to negotiate after they were told their wages would be frozen.
"This is a historic and transformational agreement that has been reached between the government and OECTA," Education Minister Laurel Broten said Thursday. "It tackles the issues that we set out to tackle when we began these provincial discussions"
OECTA president Kevin O'Dwyer said these talks were toughest in his 20 years of bargaining. The deal, which has yet to be ratified, will likely be voted on by union members next week, said O'Dwyer.
The teachers will no longer be allowed to bank sick days, and their allotment of 20 sick days a year is cut to 10, Broten said.
Three unpaid "professional development days" in the second year of the contract will amount to a 1.5-per-cent pay cut. Teachers don't have to show up for work on those days, Broten said. The government, meanwhile, backed off its demand to freeze the salary grid, which gives increases as teachers gain additional experience.
'Road map' for other negotiations
The Liberals are trying to get workers in the broader public sector to accept a wage freeze as they battle a $15-billion deficit.
"Many people thought that this day would never come, that we would never agree, that we were too far apart," said Broten. "But this agreement demonstrates the value of partnership."
Broten said this deal will serve as a "road map" for bargaining with other teachers' groups.
The province they'll legislate the freeze on all teachers unions if all other options fail.
Three teachers' unions — the Elementary Teachers Federation of Ontario, the Ontario Secondary School Teachers' Federation and the Association des enseignantes et des enseignants franco-ontariens — are set to hold a joint news conference along with the Canadian Union of Public Employees on Friday in which they will react to the OECTA deal.
Ontario Premier Dalton McGuinty has said his government will work as hard as it can to secure agreements before school starts in September.
The Liberals are trying to broker similar deals with other teachers' groups to meet their goal of saving $250 million in 2013, plus one-time savings of $1.4 billion.