Industrial action, which would have affected Auckland bus services on Monday, has been called off after last ditch talks.
The strike, impacting on services by five bus operators, will not go ahead after a meeting on Friday between NZ Bus, the Tramways Union and First Union.
The groups agreed a settlement of their collective agreement which will see NZ Bus drivers among the highest paid in the industry.
"We are delighted that agreement has been reached," NZ Bus chief operating officer Shane McMahon said.
An earlier deal agreed between union negotiators and NZ Bus was rejected by bus drivers on Monday and they had planned to strike one day a week for nine weeks starting on Monday.
NZ Bus said before Friday's meeting it would offer another pay increase, lifting pay rates to $20.40 per hour from December 2104 in a bid to avert the strike.
NZ Bus runs more than half of Auckland's bus network, and services operated by Metrolink, North Star, Go West, Waka Pacific and all Link buses were going to be cancelled if the strike went ahead.