The BBCBirmingham City Council has had to deal with thousands of equal pay claims more than a year after it effectively declared bankruptcy.
Employees of the local authority and Birmingham Children’s Trust will settle their claims but the full terms of the agreement will be confidential.
The authority said a proposal would be placed before the council’s cabinet on December 17 to seek formal approval.
A spokesman for the union Unison said women on the council would “finally get the pay justice they deserve”.
The dispute relates to claims staff working in female-dominated roles, such as teaching assistants, are paid less than in historically male-dominated areas of the council, such as waste collectors.
The council declared effective bankruptcy last year. He signed off a budget earlier this year that included cuts of £150m over the next 12 months, with a further £150m in cuts next year.
Councilor John Cotton, leader of the city council, said the deal marked the end of an “intense round of negotiations” between the authority and its unions.
“This is an important step in the council’s journey of improvement,” he added.
“I would like to thank GMB and UNISON for approaching these negotiations constructively.”
Rhea Wolfson, the GMB union’s head of industrial relations, described the deal as “historic” for women in the council.
“This result would not have been possible without his dedicated and tireless leadership of a campaign that overcame great odds,” he added.
Claire Campbell, from Unison, said the settlement would be “a good day for low-paid women” on the council.
“They will finally get the pay justice they deserve,” he added.
“Hopefully this will be a much-needed turnaround for staff, services and local communities across the city.”