Postal workers in Weston-super-Mare have called off their strikes due on Saturday and Monday.
Workers claimed they had not received a pay rise
Staff at the town's sorting office were in dispute with Royal Mail over pay. The union says the matter is resolved.
Management and the union were able to agree details of the settlement linking a productivity payment to changes in working practice.
A union spokesman said he would be recommending members accept the revised deal at a meeting on Saturday morning.
He said safeguards to the deal had been agreed with the management.
"We are pleased with the outcome; it's unfortunate it has taken this long to sort out," he said.
A Royal mail spokesman said he was "delighted" the industrial action had been averted.
"We want to work together with the union to make sure their members get the money in their pockets as soon as possible," he said.
The strike would have affected deliveries to tens of thousands of homes and businesses in the BS22, 23 and 24 areas.
Royal Mail had managers standing-by from as far away as Truro, Chester and Reading to keep the service running.