The agreement, initialled by the labour ministry and some public sector unions which threatened to go on strike, is expected to be signed next week.
Under the agreement, salaries can grow when Croatia achieves economic growth for three consecutive quarters and when the budget deficit is below three per cent of gross domestic product.
Labour Minister Mirando Mrsic said the agreement did not mean "delayed unionism" but clearly stated that salaries could grow when the economic situation was better. He hoped that all unions which took part in the negotiations would sign the agreement.
Mrsic said the negotiations were tough, without winners or losers, and that they were a pledge of good social dialogue in the future.
Congratulating Mrsic and the other negotiators, Prime Minister Zoran Milanovic said the moment when it would be possible to raise salaries would not be a moment for celebration but satisfaction.
He said salaries could not be higher now but that this may happen perhaps even before the unions expected.