The university and its faculty association reached a last-minute deal Monday night about half an hour before professors were to hit the picket line.
As a result, classes will continue as scheduled.
The three-year agreement on all major issues will ensure there will be no work stoppage.
The parties have agreed to have the remaining issues sent to arbitration.
The two sides opted for mediation last Friday after conciliation talks failed.
“I extend my congratulations to the bargaining teams for all their efforts to reach a negotiated settlement,” said David Barnard, the university's president.
“Most importantly, I am pleased to be able to inform our students that we will be open and operating with no disruption to their learning.”
Details of the pact were not immediately available.
University administrators had offered professors 8.9 per cent over four years, while the union wanted 5.8 per cent in a two-year deal.