Workers at Cammell Laird have voted to call off further strike action.
A dispute over pay and conditions saw picket lines staged at the main gate of the Birkenhead shipyard after talks with its bosses had reached an impasse.
The GMB and Unite unions had hoped to agree a three-year deal over the new terms for workers but Cammell Laird were holding out for five years.
However around 450 members backed an end to further industrial action after a two-part agreement was reached as a compromise with the help of ACAS.
An initial three-year deal sought by unions was agreed with an additional two in the second part.
GMB organiser Albie McGuigan said: “We believe that this agreement, achieved with ACAS assistance, has been made with a mutual understanding of the needs and aspirations of our members and the long-term ambition of the company.
“We hope that Cammell Laird can now concentrate on future contract bids and build upon their recent success by winning further orders in both the private commercial and UK Ministry of Defence sectors.
“If this could be achieved it would then lead on to job security in the shipyard and help to support its supply and contractor base in the North West region.
“It would further help to provide additional investment in apprenticeships and training, therefore providing the skills for the future of the UK shipbuilding industry.”
Cammell Laird recently secured a £10 million contract for the building of a ferry for Isle of Wight-based operator Red Funnel.
The company’s annual accounts posted a pre-tax profit of £7.4m, three times the previous financial year, but also a £4.5m drop in turnover from £99m.