Hamilton bus services will return to normal on Saturday, FIRST Union agreeing to cease its industrial action against Go Bus.
Drivers threatened to let passengers ride free for two weeks, and the company responded by locking them out.
Hamilton and Waikato Regional Councils have stepped in to work on options to settle the pay dispute, which was beginning to get ugly with claims a bus was driven directly at the strikers' picket line on Friday.
Hamilton public transport committee co-chair Russ Rimmington says the ceasefire is great news.
"It's an enormous relief. We're priding ourselves as we make public transport the first choice in the Waikato - not just the poor person's alternative."
Mr Rimmington says all parties are willing to negotiate, and appear to be close to a settlement.
"The bones of it… are not just a quick fix. In my opinion it's a permanent outcome - it will be satisfactory to Go Bus and to the drivers."
The pay dispute has been running for 20 months. FIRST Union members say they're paid between $17.35 and $19.46. They want the living wage of $20.55, but managers say they can't afford it.