Jordanian Foreign Minister Ayman Safadi announced the deal with UNRWA employees, involving salary rises of between 70 and 100 Jordanian dinars (88 to 126 euros) per month from January, at a late afternoon news conference with union representatives.
"Consequently, it has been decided to put an end to the strike," said Riyadh Zyghan, leader of the UNRWA employees' union in Jordan.
More than two million Palestinians are registered in Jordan as refugees with UNRWA, which provides everything from healthcare to schooling.
Around 7,000 workers had joined the strike, forcing a shutdown of agency facilities, according to UNRWA spokesman in Jordan Sami Mshamsha.
Mshamsha said the union demanded a salary increase of 200 Jordanian dinars, but agreed to ask for half that amount following negotiations with UNRWA.
The union of UNRWA workers had said the action would be "open-ended" and had told pupils and students they should stay at home.
The strike came as the agency faces an unprecedented financial crisis.
In 2018, the United States suspended and later cut all its funding for UNRWA, causing a shortfall that threatened to close its schools and hospitals.
Those woes were compounded by allegations of abuse by the agency's management, leading other key donors - the Netherlands and Switzerland - to snap shut their purses.
In June, UNRWA Commissioner General Pierre Krahenbuhl told a news conference in Amman that the agency faced an expected $211 million shortfall in funding for 2019, and called on donors to fill the gap.
The agency runs 169 schools in the kingdom, serving some 120,000 students, as well as a faculty of science and educational arts, 25 primary healthcare centres and other services.
UNRWA was set up in 1949 after more than 750,000 Palestinians fled or were expelled during the war surrounding Israel's creation the previous year.
It provides vital schooling and medical services to some five million Palestinians in Jordan, Lebanon, Syria, the Gaza Strip and the Israeli-occupied West Bank, including annexed east Jerusalem.
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