Stagecoach Merseyside and South Lancashire welcomed “constructive discussions” with trade union Unite in pay talks covering employees based in Preston on October 6.
Unite has confirmed previously planned industrial action by members in Preston on 14, 15 and 16 October has been cancelled.
Bus services will now continue to operate as normal on those days.
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Matt Davies, Managing Director of Stagecoach Merseyside and South Lancashire, said: "We have had constructive discussions with Unite. Throughout our talks with the union, we have been 100% committed to reaching a sustainable agreement, and we have left no stone unturned to achieve that.
"Our priority has been to protect jobs and ensure our people who keep our communities connected are properly rewarded, particularly after their incredible contribution to the country during the past 18 months of the pandemic.
"We are pleased to have put together a positive pay package for our people with a strong union recommendation to accept. It also helps secure the long-term sustainability of the bus network for our local communities in the area."
New pay proposals put forward by Stagecoach are to be voted on by employees on October 11-12 with a "strong union recommendation to accept".
The deal would see employees receive a pay increase of £19.50 a week moving forward if accepted.
Unite general secretary Sharon Graham said: "Unite’s members have shown that by standing together in unity management has been obliged to make an improved pay offer.
"Stagecoach must understand that we remain utterly determined to secure proper and lasting improvements to the pay and conditions of our members."
Unite regional officer Alison Spencer-Scragg added the offer was a "welcome step in the right direction".
"Unite’s members will now decide if it meets their aspirations," he said.
If Unite's members reject the offer, the second scheduled strike - which lasts for 48 hours and begins on Friday 22 October - will go ahead.
"Buses are a lifeline for local people and a strike would simply damage the lives and livelihoods of local people, including our employees, as well as the region’s businesses," Matt Davies added.
"We are pleased the union has moved to end that uncertainty."
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