The deal represents the first pay rise in three years and follows the unions’ rejection of an initial 1.25% offer last week.

The increased minimum pay rates for the industry will come into force in September. The original rejected offer was not due to come into force until 2012.

The unions have also won an agreement that the fare and subsistence allowances will increase by 5.3% and will be payable from Monday June 27.

Talks will also begin early next year on a new deal to raise the low basic pay rates contained in the agreement.

Real pay rates in the industry are often much higher than the CIJC figures which are designed as a “safety net” minimum.

George Guy, Acting General Secretary of construction union Ucatt, who led the negotiations, said: “This is an improved offer and ends the pay freeze for construction workers.

“It has been made clear to employers that future increases must properly reflect rising costs and the difficult, demanding, and skilled work undertaken by construction workers.”

John Allott, National Officer for Construction of Unite, said: “This pay deal is a small first step in ending low pay for hard working construction workers.

“The employers side must now realise that in the future pay rises must be of a significant level to properly reflect the demanding work performed by construction workers.”

Phil Davies, National Secretary for Construction of the GMB, said; “This offer was the best that can be achieved under the current economic conditions. The union side is committed to significantly improving the agreement over the coming years.”