The GMB union has praised Yodel for "doing the right thing" and offering staff a pay increase that will see LGV drivers receive £16 per hour.
The move comes after stormy negotiations saw 95% of members vote to take industrial action, threatening the supply chains of some of the UK's biggest retailers, including M&S and Aldi.
The union is still in discussions over some outstanding issues including the settlement of an employment tribunal affecting 137 employees, which Yodel has agreed in principle to resolve.
Union members will vote on the improved offer in the coming days.
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“This is a great outcome for our LGV1 drivers at Yodel who before this earned some of the worst wages and endure less than satisfactory working conditions," said GMB national officer Nadine Houghton.
“By standing strong and together GMB members have held Yodel to account and helped the company realise the true worth of LGV drivers.
"It took some time, but Yodel did the right thing and agreed to the pay rise. Our members will not vote on the new offer and strike action may yet be avoided.
“If anyone ever doubted the worth of being in a union, they need only read this story.”
