The CWU will now put the agreement to its membership to approve.
The direct mail industry will hope the development ends the strike action that has caused severe problems with deliveries over the past few weeks.
According to a statement from the union, the agreement reached with Royal Mail settles all areas of the dispute.
Details of the deal have not yet been released by the CWU or Royal Mail.
According to a BBC report, the two sides have agreed that postal workers will get a 6.9% pay rise over two years and a lump sum payment of £175. The union will also be involved on a consultation about changing the terms of Royal Mail's pension scheme, which is currently based on final salary.