The Ministry of Education and NZEI Te Riu Roa have agreed to settle an historic pay equity claim for teacher aides.
If accepted, the settlement will see more than 22,000 teachers aides, who are mostly women, being paid fairly.
Education Minister Chris Hipkins said the settlement of the claim which was lodged in 2016 was a "milestone" and a significant step towards addressing pay equity for women in the education sector.
"Teacher aides are frontline workers who work closely with some of our most vulnerable children. They play an important role in our schools as we respond to the challenges of Covid-19 and get the country back on its feet.
"The Coalition Government recognises the vital role teacher aides play in schools and we have been focused on making sure that we do a good job for them," Hipkins said.
NZEI president Liam Rutherford said he was "absolutely delighted" by the proposed settlement.
"This process has kind of shown us what we've always known, that the work of teacher aides has been undervalued and underpaid because they're predominantly women.
"And so the settlement that we're able to talk about now is a recognition of that," he said.
Rutherford said it would lead to "wonderful flow on effects" for teacher aides as a career over the next few years.
He also praised the government for fully funding the increase.
"I know that there is going to be an awful lot of relief for principals around the country as the funding means that burden isn't going to fall back on them," he said.
During the Facebook video announcement, Hipkins thanked the women who had been instrumental in fighting for the claim.
"I want to acknowledge you guys for being brave and being bold, for putting your hands up and saying, actually the work we do is really valuable and it deserves to be properly financially rewarded, because it does.
"The work that you have all done will make it just that little bit easier for the next group who follow after you," Hipkins said.
Schools will receive the additional funds in October 2020 and teacher aides will receive the new pay equity rates by November, backdated to 12 February 2020.
The settlement costs $348 million over the next five years.