On May 1, workers in western states will see and increase of three percent, followed by another 2.3 percent in June 2012.
Construction workers in eastern states will see a 3.4 percent raise in June, followed by 2.9 percent more in August 2012.
Mediator in the negotiations was former Economy Minister Wolfgang Clement, who admitted finding a solution had been a complicated endeavour.
“It’s a compromise,” he said.
But considering the complicated industry structures between eastern and western German states, Clement said he was happy the two sides were able to reach an agreement.
Employers and unions have until April 28 to officially accept the terms, which both sides have signalled they are likely to do.