The CWU will recommend to postal workers that they accept the new pay offer, which also includes a one-off £200 lump sum before Christmas.
The agreement means the threat of a Christmas strike is averted.
CWU deputy general secretary Dave Ward said: "The agreement breaks new ground in the UK by incorporating extensive legally binding protections for employees alongside a commitment to improve industrial stability.
"The legal protections for Royal Mail employees come hard on the heels of the privatisation of the company and are unprecedented in delivering the strongest protections for employees."
Increased stability
The deal gives postal workers a 3% pay rise backdated to April this year, another 3% from April next year and 2.8% in 2015-16.
The union said it has guaranteed it will not outsource, sell or transfer any part of its business until a legal review takes place in 2019.
It claimed it has also staved off the threat of creating a two-tier workforce by ensuring any new employee joining the Royal Mail will not be on "inferior" terms and conditions.
Two sides have agreed to work towards create industrial stability with a re-launch of industrial relations arrangements and the introduction of mediation procedures alongside new governance arrangements.
Despite hailing the deal as good for employees and the company, Ward warned Royal Mail must keep to its agreements in the long-term. "Investors should be clear that this agreement commits them to growth and there will be no tolerance to a race to the bottom on services and jobs," he said.
Royal Mail's boss Moya Greene said the deal would provide "long-term stability and certainty for Royal Mail, our employees and our customers".
"Working together we can create a strong foundation for the continued success of our business," she added.
