Canadian National Railway Co. CNR-T says it has reached a tentative agreement with the union representing about 750 signals and communication employees across Canada.
The railway had faced a potential strike today by the workers represented by the International Brotherhood of Electric Workers.
Details of the tentative four-year agreement, which still must be ratified, were not immediately available.
Workers had voted 95 per cent in favour of a strike if a deal could not be reached.
The union had said it was pushing for better work-life balance and higher pay.
The current collective agreement between the union and the railway expired on Dec. 31.