The accord entails a near 4.6-percent salary hike on average, said the UFO trade union that represents some 18,000 cabin staff.
Lufthansa said the deal would be valid for two years, from January 1. The airline also agreed to refrain from operational layoffs until the end of 2014.
Lufthansa and the UFO union agreed to mediation in the dispute after staff staged strikes in September grounding hundreds of flights which mostly hit Frankfurt airport, Lufthansa’s main hub and Europe’s third-busiest airport.
The union had initially called for a five-percent pay rise while Lufthansa offered 3.6 percent.
The airline has engaged in a severe cost-cutting programme and has already announced the loss of 3,500 administrative jobs but last month it reported a sharp rise in earnings in the third quarter.
In one concession to the unions, Lufthansa had already agreed not to employ temporary cabin crew until 2016.