The agreement is subject to a vote by union members next week, the company added. Unionized workers at GM Daewoo, South Korea's third-largest auto maker, held a partial strike on July 14 and 19, seeking an 8.55 percent rise in base salary and better working conditions, among other requests.
The strike has cost GM Daewoo an estimated 2,200 vehicles in lost output, the company said.
General Motors, the world's biggest auto maker, and partners took a majority stake in some of the assets of Daewoo Motor in 2002, creating unlisted GM Daewoo, which makes mainly sub-compact models such as the Matiz and Lacetti.
The deal comes as unions at GM Daewoo's rivals hold similar labor actions.
Union employees at Hyundai Motor Co., South Korea's top auto maker, have stopped work for several hours each day since June 26 as they demand higher salaries and incentive payments.
But Labor Minister Lee Sang-soo said in an economic ministers' meeting that the dispute at Hyundai was expected to be resolved as early as Friday.
Chung Sye-kyun, South Korea's commerce minister, also said on Friday he was concerned that the strikes at Hyundai would affect the country's exports.
Unionized workers at Kia Motors Corp., Hyundai's affiliate, stopped production for several hours from Tuesday to Thursday. Kia's union resumed work on Friday without any agreement.
The union will decide on further action after negotiations with the management on July 25, a union official said.
Unionized workers at Ssangyong Motor, a sports utility vehicle maker, have halted work since July 14 in pursuit of a salary increase and to protest against job cuts sought by its largest stake holder, China's Shanghai Automotive Industry Corp.