Minister of Health Andrew Little said the agreement was "hugely significant" and will give pay rises to hospital administration and clerical workers across the country.
"Negotiating pay-equity agreements can be challenging, involving complicated processes to establish how much pay rates are affected by the fact that most of the people working in jobs are women," Little said.
PSA national sector leader Sue McCullough said thousands of workers - mainly women - will receive pay that recompenses labour, not gender.
"Pay equity will change the lives of many of these workers, with some to receive pay rises of up to 40 per cent. Not all roles within the sector have been underpaid as significantly as others, so pay rises will vary."
Meanwhile, union delegate and long-time advocate for pay equity Nancy Mc Shane said the announcement brought tears to her eyes.
"Settlement of this equal pay claim is another important step towards true equality for all women in Aotearoa and will be profoundly transformational in the lives of my DHB Admin colleagues," she said.
The settlement comes a day after allied health workers, separate to the DHB administrators and clerical staff, went on strike.
Elective surgeries and clinics scheduled across the country were disrupted on May 15 as 10,000 workers walked off the job for 24 hours.
The strike was held after more than 18 months of negotiations between the parties for a new collective agreement, including work-to-rule plans where staff refused to work more than their contracted hours, and took all breaks they are entitled to.
Hospital workers under the "Allied Health" multi-employer agreement include laboratory and anaesthetic technicians, oral health therapists, alcohol and drug clinicians and sterile sciences technicians. They don't include doctors, nurses or midwives.
