Ms Smith said the deal was one of the fairest in the public sector
Police have agreed a new three-year pay deal with the government.
UK officers will receive a 2.65% increase from September, with another 2.6% in 2009 and 2.55% in 2010. This is an average of 2.6% each year.
The Police Federation in England and Wales said it was the "best multi-year settlement... in the public sector".
It follows a dispute between the federation and Home Secretary Jacqui Smith over a refusal to backdate a previous pay rise of 2.5% in 2007.
The new deal, which covers all officers in England, Wales, Scotland and Northern Ireland, includes a "re-opener clause" which will cater for any marked changes in the economic situation or for if there are problems with police retention and recruitment.
In the current gloomy economic climate this is a very good deal for UK police officers and the best multi-year settlement secured in the public sector
Paul McKeever, Police Federation of England and Wales
The agreement also secures the future of the Police Negotiating Board (PNB) - which negotiates police pay, terms and conditions - after a proposed Home Office consultation on introducing a police pay review body was dropped.
Paul McKeever, chairman of the Police Federation of England and Wales, which represented all UK rank-and-file officers during negotiations, said the deal was "a success" both in terms of pay and in securing the future of the negotiating board.
"In the current gloomy economic climate this is a very good deal for UK police officers and the best multi-year settlement secured in the public sector."
Mr McKeever said attention would now focus on negotiations over an on-call allowance and the use of electric stun guns.
He said an on-call allowance should be introduced "as a matter of urgency" and stun guns rolled out to all frontline staff.
'Protect and serve'
Phil Blundell, chairman of the PNB, said negotiations had been "complex and difficult", stretching the "affordability for government and police authorities alike".
The Police Federation's Paul McKeever said he was content with the deal
But he added: "It is incredibly important that we get central issues such as police pay right, both for now and the future, and this deal has given all sides the opportunity to do just that."
Ch Supt Pat Stayt, who represents superintendents and chief superintendents on the negotiating board, said the pay increases were "not excessive" but would "enable officers to know what their pay will be".
The home secretary described the agreed deal as "one of the fairest pay deals in the public sector".
CURRENT POLICE PAY
Constable - £21,534-£33,810
Sergeant - £33,800-£37,998
Inspector - £43,320-£46,989
Chief Inspector - £47,949-£49,923
Source: Police Negotiating Board
"I have the highest regard for the police and the tireless work they do to protect and serve the public," she said.
"This deal gives police officers and their families valuable financial certainty for the future and I hope that it will reach their pay packets in full in time for Christmas."
Police officers lost a High Court battle earlier this year over Ms Smith's refusal to backdate a 2007 pay rise in England, Wales and Northern Ireland from December to September - which effectively reduced its worth to 1.9%.
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