Thousands of women at Newcastle City Council are to receive a share of more than £12m in an equal pay deal.
It will benefit 2,800 workers, such as cleaners and care-at-home staff, who will receive average payments of £3,931 although some will get £13,000.
The council brought in a fairer pay structure in February 2004 to address present and future pay arrangements, but this deal is retrospective.
The agreement was reached after five months of talks between the council and its unions.
Council leader Peter Arnold said: “The city council is committed to fair pay and equality and is pleased to have reached an agreement thereby avoiding costly legal proceedings and staff having to give evidence in court.”
Unison branch secretary Kenny Bell said: “Equal pay does not come cheap. We now have an equality-proof pay structure and have compensated women workers for past inequalities.”