The announcement follows talks between the Federation of Master Builders on behalf of SME construction employers, and Unite on behalf of operatives.
Workers will receive a 2.5% pay rise this year and a further 2.5% increase in 2017.
The rise will be across the board, with the exception of hourly rates for lower paid general operatives who will get a bigger boost of 4% this year, followed by 2.5% next year.
Brian Berry, FMB Chief Executive, said: “This is a good deal which provides certainty and reassurance to employers and employees alike.
“It strikes the right balance between on the one hand recognising the importance of boosting pay in line with solid growth and positive future expectations, and on the other hand accepting that margins continue to be tight and the economic outlook continues to be clouded by a number of uncertainties.”
John Allott, Unite the union’s National Construction Officer, said: “We welcome this pay increase and the FMB’s commitment to the BATJIC agreement.
“The higher increase to the lowest paid was needed, as many operatives living standards took a knock during the economic downturn.”