The Treasury has agreed more than £3bn funding for NHS pay deals as unions begin balloting on the offer, The Telegraph understands.
Ministers have promised that the offer to more than one million NHS staff - including nurses, midwives and ambulance staff - will not drain funds from frontline services.
Under the terms, workers would receive a bonus of between £1,655 and £3,800 this financial year, while most would get a 5 per cent rise next year - with a higher increase for the lowest paid.
Downing Street has said the total package will cost £4bn, with a 3.5 per cent increase next year already factored into NHS budgets.
This leaves around £1bn to be found from “reprioritisation” of existing budgets, which ministers say will not hit frontline services.
The Royal College of Nursing is balloting up to 280,000 members on whether to accept the deal. Members have until April 14 to vote.
'Fair and balanced offer'
Steve Barclay, the Health Secretary, said: “This fair and balanced offer recognises the vital role these hardworking NHS staff play, while protecting our commitment to halve inflation - and I urge union members to accept our offer.
“I'm working with the Treasury to ensure my department has the money it needs to fully fund this pay offer, which will include additional funding and reprioritising existing budgets. This is on top of the existing funding we have already made available for a pay increase of up to 3.5 per cent in 2023-24.
“I want to be clear – there will be no impact to frontline services or quality of care as a result of this offer.”
The RCN vote comes after six days of strikes since December in the long-running dispute over pay.
RCN general secretary and chief executive Pat Cullen urged members to look at the offer in full.
'Extremely difficult strike action'
Ms Cullen said: “Ministers spent many months ignoring the voice of nursing and they forced us to take extremely difficult strike action before recognising the need to look again at pay in the NHS.
“Weeks of negotiation resulted in a new offer and it’s only right that we ask our members to vote again and to give their view on the Government’s proposal.”
On the proposed deal made on March 16, she said: “We are urging our members to look at the offer in full. There are several elements, including a commitment to a policy framework for safe staffing and looking at a new pay spine for nursing.
“Nursing staff have fought proudly for their profession and patients alike in recent months. Our membership has never been stronger and their determination has led to this new offer.”