The new multiyear deal could set a template for negotiations with more than 150 other unions working on expired contracts.
The 9-year agreement will implement a number of groundbreaking reforms that the city says will make schools laboratories of innovation and improve public education for every student, while also making important changes that will provide more than $1 billion in health care cost savings over the next four years.
"Working together with our dedicated teachers - instead of being locked in rancorous debate - we have found common ground today that moves us closer to those critical objectives," said Mayor Bill de Blasio. "Everyone needs to play a positive role in our children's future, and this agreement deepens parental engagement, recognizes quality teachers, and ensures our students will benefit from a new era of educational reforms that will improve learning and performance in the classroom."
The United Federation of Teachers represents 100,000 teachers and other school employees who have been working on an expired contract since 2009. Union leaders have long pushed for substantial retroactive raises of up to $3.4 billion.
Under the proposed agreement, teachers would receive similar raises to those that had been granted by the previous administration to much of the municipal workforce of 4 percent each for 2009 and 2010. The raises will be restructured and provided to teachers in increments from 2015 to 2020. The agreement includes a one-time $1,000 ratification payment. Wage increases constituting a new pattern for the following years are on the schedule below:
May 2013: 1%
May 2014: 1%
May 2015: 1%
May 2016: 1.5%
May 2017: 2.5%
May 2018: 3%
The deal ends years of hostility between the teachers union and City Hall. De Blasio's predecessor, Michael Bloomberg, declined to grant any retroactive raises and often engaged in verbal clashes with the union's president, Michael Mulgrew.
"Mayor de Blasio said we could make the city better if we all worked together in a spirit of respect and cooperation. This agreement - which works for students, parents, teachers and the city - is proof that with leadership like his, we can do it," Mulgrew said.
Bloomberg, a Republican turned independent, long said the city could not afford the retroactive raises, which could total up to $8 billion. Many of the unions ended negotiations in recent years preferring to wait for a new mayor who may have warmer relations with unions; as a result, all of the city's unions' contracts had expired by the time Bloomberg left office.
De Blasio, a Democrat who took office in January, is a close ally of unions but has also expressed wariness about the city's ability to afford retroactive raises for all unions. Other labor leaders were anxiously eyeing the UFT negotiations believing it could establish baselines for future negotiations.
The Associated Press contributed to this report.