Members of the Union of Rail, Maritime and Transport workers (RMT) have voted to accept Tube Lines' proposed pay settlement, made prior to a 72-hour strike due to have started two weeks ago.
The strike, of 1,000 Tube Lines workers, would have crippled London Underground services in the capital, but was abandoned while the RMT consulted its members on the proposals.
Tube Lines works to upgrade one-third of the London Underground network under the Public-Private Partnership agreements, signed in 2003 to run for 30 years.
Members voted by a margin of four-to-one for the new pay and conditions, of a 4.99% increase this year and RPI plus 0.85% in 2009, with significant improvements in travel subsidies and substantial minimum rises for the lowest-paid grades and apprentices.
According to RMT general secretary Bob Crow, "Tube Lines had told us that they'd made their final offer, but thanks to our members' determination the company came up with improvements that the RMT executive felt it could recommend and that our members have now endorsed.
"RMT members at Tube Lines stood together in a hostile atmosphere and are to be congratulated for the solidarity and commitment they displayed in very difficult circumstances.
"There remain issues to be addressed, but once more our members have demonstrated the truth in the slogan that unity is strength," Bob Crow said.
The RMT had argued that the new terms and conditions were essential to keep Tube Lines staff on par with those working at Metronet, who had been bought by Transport for London in May, giving staff there improved pay and conditions, including access to TfL's final salary pension scheme.
Tube Lines chief executive Terry Morgan said: "This is a good deal for Tube Lines. We are pleased that, following constructive discussions with the RMT today, we have been able to agree in principle a two year deal that will satisfy all parties."
A Tube Lines spokesperson said, "95% of those employees covered by this pay deal will now be earning more than there counterparts at Metronet. Most of those covered by the pay deal are already in the TfL final pension scheme and we are not aware of anyone having left recently to go over to Metronet over pay and conditions."