The agreement also provides for two $1,500 one-off payments with the first to occur prior to Christmas and another 12 months later.

The new agreement follows months of good faith bargaining negotiations between SA Water and employee representatives, including the Public Service Association (PSA).

The agreement covers around 1,500 workers and was approved by a majority of voting employees in a ballot that concluded on Wednesday.

The agreement will come into effect after approval by the Fair Work Commission.