Principals will get 17 to 19.6 per cent added to their wage while support staff have won between 12 and 17.1 per cent.
Teachers, support staff and principals also get a one-off $1000 on their salary.
Catholic school teachers will get the same increase, as their wages are parallel with state schools.
The increase will make Victorian teachers the second best paid in Australia behind Western Australia.
The agreement is still to be endorsed by members of the Australian Education Union after being agreed on by the union’s council.
Australian Education Union state president Meredith Peace added hours and class sizes would not increase.
“We are confident that this in-principle agreement will play a significant role in addressing state wide staff shortages, provide an incentive for teachers to stay in the classroom and reduce the level of contract employment,” she said.
Premier Denis Napthine, whose government has been pushing for a performance pay agreement, said the public can find out how much the deal costs in the budget.
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