The union for Air Canada's 10,000 flight attendants said early on Tuesday that it has reached a “tentative agreement” to end a strike.
Air Canada and the union resumed talks late on Monday for the first time since the strike began over the weekend.
The strike is affecting about 130,000 travellers a day at the peak of the summer travel season.
The union said the agreement will guarantee members’ pay for work performed while planes are on the ground, resolving one of the major issues that drove the strike.
It followed the union’s declaration that the flight attendants wouldn't return to work even though the strike was declared illegal.
Air Canada had stopped all operations after some 10,000 flight attendants began industrial action fuelled by a wage dispute just after midnight on Saturday.
Hours later, Canada's Labour Policy Minister, Patty Hajdu, moved to invoke a legal provision that would halt the strike and force both sides into binding arbitration.
"This is not a decision that I have taken lightly. The potential for immediate negative impact on Canadians and our economy is simply too great," Hajdu had told journalists.
