Nurses in Scotland are to be given their pay rise in full on 1 April, rather than the staged increase recommended by Chancellor Gordon Brown.
Nurses north of the border will receive a higher wage increase
He announced last week that nurses would get a pay award of 1.5% from April and a further 1% from November.
Scottish Health Minister Andy Kerr said the NHS finances are on a firm footing in Scotland and the nurses deserved their full 2.5% settlement now.
Health care union Unison said that it was delighted with the decision.
Scotland's 67,000 nurses and thousands of other health professionals will get their pay increase next month.
Glyn Hawker, Unison's Scottish organiser for health, said: "We are delighted that the strong lobbying by Unison has borne fruit.
"The minister has listened to health workers' concerns. This reflects the more effective and co-operative nature of the NHS in Scotland."
About 300 nurses had been due to leave a conference at Dynamic Earth and stage a rally at Holyrood protesting over what they claimed was a pay cut in real terms.
The Royal College of Nursing in Scotland said nurses had felt angry, frustrated and let down by last week's UK Government announcement on pay.
Responding to the minister's announcement, Scottish National Party health spokeswoman Shona Robison said: "The SNP welcome this u-turn as it is the right decision.
"At a time when we expect more and more from our nurses it is an insult that such a derisory offer was made by Labour in London - particularly when the pay review body recommended a higher figure and the government has found money for others."
Tory health spokeswoman Dr Nanette Milne said: "This is very good news, and I am delighted that, for once, Andy Kerr has listened to the concerns of health workers."
Dr Peter Terry, chairman of the British Medical Association in Scotland, said: "The minister should be congratulated for taking this step as it reflects better the situation in NHS Scotland and hopefully this will set a precedent for the future."
Call for equal treatment
Unions south of the border called on the government to follow the lead of the Scottish Executive.
Karen Jennings, head of health at Unison, said Scotland had only decided to give nurses their due.
She said: "This decision should shame MPs in Westminster into taking action over the shabby way our nurses and health workers are being treated by the government in this pay round.
The RCN said it did not want to see separate pay deals
"It is untenable to leave nurses in England and Wales out in the cold. They deserve fair and equal treatment."
Dr Peter Carter, RCN general secretary, said: "By following the recommendations of the Independent Pay Review Body, Scotland's executive is also setting an example that the government in Westminster should follow as a matter of urgency."
He said the RCN did not want to see separate pay deals for the different countries of the UK.
However, a Department of Health spokesperson said: "Decisions on pay for health professionals working in Scotland are for the Scottish Executive, reflecting their own regional issues.
"The government has already announced the pay award for health professionals in England and Wales - a fair award reflecting the balance between the right level of pay and the need to be vigilant against the threats of inflation."