Ron Gettelfinger said staff would now return to work

UAW president Ron Gettelfinger said work at GM's US plants would resume on Wednesday, and ratification of the deal by workers would begin this week.

GM said the new contract included the setting up of an independent trust to cover the cost of retiree health care.

The strike centred on GM's plans to reduce health and pension benefits.

'Significant investments'

The firm said the deal "paves the way for GM to significantly improve its manufacturing competitiveness, providing the basis for maintaining and strengthening its core manufacturing base in the United States".

This agreement helps us close the fundamental competitive gaps that exist in our business GM boss Rick Wagoner

Analysts have estimated that the establishment of the independent trust will cost GM a one-off payment of more than $30bn (�15bn), but then cut its annual costs by $3bn.

Neither GM or the UAW have given any details.

More than 73,000 GM workers had walked out on Monday.

They took industrial action after 10 weeks of talks failed to reach a new contract agreement.

It was the first time that the UAW had called a national strike against GM for more than 30 years.

'Closing the gaps'

GM chairman and chief executive Rick Wagoner said he was confident the deal would be ratified by UAW members.

"This agreement helps us close the fundamental competitive gaps that exist in our business," he said.

"The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments."

Analysts say that once the GM deal is ratified, the two other main US carmakers, Ford and Chrysler, are likely to follow suit with their own new deals with the UAW.