Employers and unions have reached a “good and fair wage agreement”, Interior Minister Nancy Faeser said in a statement.

The deal comes after several weeks of stalemate and repeated strikes among postal, transport and health workers demanding more money to cope with the rising cost of living.

Under the agreement, some 2.5 million public sector workers will see their wages increase by 5.5 percent or at least €340 ($377) per month from March 2024.

From June 2023, a tax-free inflation compensation payment of €3,000 is to be paid in several instalments.

“With our decision to enter into this compromise, we have gone to the limits of our tolerance,” said Frank Werneke, head of the Verdi union.

Verdi had demanded a 10.5 percent increase in monthly salaries or at least €500 per month.

The union was one of the major forces behind a nationwide strike at the end of March that paralysed the transport sector in Germany.

Inflation in Germany stood at 7.4 percent in March, remaining high despite having fallen from a peak of 8.8 percent in October.

Talks are still ongoing in other sectors, such as rail transport, where workers held a half-day strike on Friday.

Postal workers obtained average monthly increases of 11.5 percent in March, and in November IG Metall, Germany’s biggest union, won hikes totalling 8.5 percent for almost four million employees.

Airport security staff are due to go on strike at Berlin Brandenburg airport on Monday.