The Australian Nurses Federation said mental health nurses would now receive similar pay and benefits to public sector nurses.
Victoria's mental health nurses have settled their workplace dispute with the state government after months of industrial action.
Union members representing the state's psychiatric nurses, support staff and mental health workers voted last week to accept a draft pay and conditions agreement, bringing an end to work bans and rolling strikes that had stretched on for more than six months.
"We're pleased that we were finally able to get there," said Lloyd Williams, state secretary for the Health and Community Services Union (HACSU).
"But we're disappointed that it had to take so long."
Workers had been without an enterprise bargaining agreement since November last year.
The union originally asked for a 16 per cent pay rise over three years but the state government's public sector wages policy had been set at 2.5 per cent, with any further increases offset by productivity bonuses.
The agreement has seen the union settle for a 2.5 per cent annual pay rise but members can boost their pay by as much as 4.6 per cent through professional development allowances.
Minister for Mental Health Mary Wooldridge said the new agreement would help improve outcomes for some of Victoria's most vulnerable.
The Australian Nurses Federation said it was pleased that mental health nurses now received similar pay and benefits to other public sector nurses.
The government has also agreed to set staffing levels, the HACSU said, and to fund 43 more mental health positions.
Williams said the new positions would help but Victoria was still chronically short of fixing the shortages and problems in mental health care.
The entire membership will have to vote on the draft agreement reached on Thursday, within the next eight weeks.
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