Deutsche Post and the union agreed to compromise on layoff protection, work hours and raises, the German postal service and logistics company announced on Wednesday afternoon in Bonn.
Walter Scheurle, the Deutsche Post management board member responsible for personnel, called the agreement a "sustainable compromise" for both sides and "positive news for our workers, customers and shareholders."
Verdi members voted 93.1 percent in favour of an unlimited strike, the union announced earlier in the day. Verdi represents about 130,000 workers at Deutsche Post. The vote came after a series of limited strikes at mail sorting centres left tonnes of letters and bulk mail undelivered across Germany last week.
The agreement rules out layoffs until June 30, 2011. Working hours will also remain at 38.5 hours per week, a major sticking point for Verdi. Deutsche Post had wanted to increase hours to 41 hours a week instead of 38.5 hours, something the union said could endanger 12,500 jobs.
The deal includes a wage increase of 4 percent in November and a 3 percent increase in December 2009.