Further education college chiefs and lecturers' union leaders have come to an 11th-hour agreement over pay to avoid a two-day strike next week.
Both sides are hoping that the deal will release an extra £5 million offered by the government in a bid to overcome months of deadlock.
The breakthrough came when the Association of Colleges agreed to make a commitment that all staff eligible for Teaching Pay Initiative money would receive a share of the £5 million.
This would bring the value of the employers' pay offer up to 4 per cent from April next year - an increase that members of Natfhe's further education committee indicated they would be prepared to accept when they met last weekend.
College lecturers who are members of the union will be consulted on whether to accept the pay proposals. It is expected they will take the committee's advice and give their support.
Natfhe previously rejected the employers' offer because the AoC refused to give assurances on how the extra £5 million would be spent.
The AoC said it could not make such a commitment because the government had said the money could not be released until the union called off its threatened strike.
Following this week's deal, Paul Mackney, Natfhe's general secretary, said:
"It's time to recognise that a tangible start to closing the gap between college lecturers' and school teachers' pay has been made, thanks to the determination of Natfhe members. We'll be putting on the pressure to ensure that the employers now deliver their side of the bargain. If they don't, we'll be back."
Ivor Jones, the AoC's director of employment policy, said: "We are delighted that the outcome has been so positive. The AoC has always been committed to extending the TPI as equitably as possible."