The union for disability support workers says a deal under which the Government will pay $90 million towards minimum wages for sleepover shifts is fair.
The Cabinet on Monday approved an agreement between the Service and Foodworkers Union and the Government that ends a five-year legal battle to secure the workers the minimum wage for the overnight sleepover shifts.
Earlier this year, the Court of Appeal ruled in the union's favour.
Prime Minister John Key says the deal is a fair one, ensuring quality care for people with disabilities and their families.
He says all parties have agreed not to continue with litigation currently before the Supreme Court.
Under the deal, workers will go from being paid 3.77 an hour to the minimum wage - at present $13 per hour - by July 2013.
The union says the extra money will encourage workers to do overnight shifts which are difficult to staff.
The Government will also put $27.5 million dollars towards back pay, which will be paid at 50% of the approximate minimum wage from July 2005 until the end of June 2011.