The deal, expected to be formally agreed by unions and ministers later, could cost as much as £4bn.

If approved, workers in England could see their pay increase almost immediately.

The deal is tiered - with the lowest paid getting the biggest annual rises.

The agreement covers all staff on the Agenda for Change contract - about 1.3m across the UK, which is the entire workforce with the exception of doctors, dentists and senior leaders.

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There are nine different pay bands, ranging from £15,000 a year for porters, cleaners and kitchen staff to over £100,000 for heads of department.

A nurse starts on band five, with a starting salary of £22,000. The highest paid frontline position is band eight, which can pay up to £80,000 a year.

It is thought those on the lowest salaries could see their pay rise by £4,000 and it is believed that the deal guarantees a minimum rise of 6.5%, with many getting more.

It will be up to the devolved governments to decide whether to implement the deal outside of England.

Scotland has already given its lowest paid staff bigger rises so there could be some divergence in how the terms are introduced elsewhere.

Treasury puts its money where its mouth is

By Laura Kuenssberg, political editor

The government indicated some time ago that the pay cap, which had been one of the main restrictions that held back public spending, was over.

But this deal could pave the way for expensive, even if overdue, pay deals for other parts of the public sector.

Crucially, sources say the deal will be fully funded by the Treasury, rather than coming out of existing NHS budgets.

The precise detail of what ministers say will therefore be vital. But the move is likely to add to the growing sense, including in Tory party, that somehow, more cash for the health service needs to be found.

But an attempt to get workers to give up a day's holiday in return for bigger rises has been headed off by unions.

Instead, there is expected to be some movement on automatic in-the-job pay rises, called increments, which are given on top of the annual pay award which is available to all.

Last year, half of staff received rises worth between 3% and 4% on top of the 1% annual pay rise.

Health Secretary Jeremy Hunt has previously argued these are outdated and simply reward "time served".

The deal still has to be ratified by the NHS Staff Council, which represents 14 unions. It is due to meet later, but sources close to the talks have indicated they are happy with what is on offer.

The government first announced it would lift the public sector 1% pay cap in September for police and prison officers. and then followed that with a promise in the Budget that NHS pay would be looked, lifting the 1% cap a yearly early.

The NHS has been under pressure to retain staff, after it was revealed that one in 10 nurses were leaving the public sector in England every year.

The Royal College of Nursing claims average nurse pay has fallen by more than 14% in real terms since 2010.

Statistics obtained by the BBC from NHS Digital showed 33,000 nurses walked away in 2017, piling pressure on understaffed hospitals and community services.

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