"It's absolutely significant," said Tramways Union secretary Kevin O'Sullivan.
He said it was the best news for drivers and for the network since changes were made to the network two years ago.
The change saw the regional council contract a number of operators to run the buses instead, but it caused a raft of delays, cancellations and overcrowding.
"I think it's also an acknowledgement that that model hasn't really worked very well, and change is needed to be made, so this is the first step in just improving the whole industry."
There are still some finer details to be worked out, such as weekend rates and night rates, and the company has gone back to cost those. Another meeting to finalise those is set for next week, with the plan to roll out the living wage for NZ Bus drivers by April 19.
"We want all our drivers to have pride in what they do and a part of that is rewarding and recognising people appropriately," Metlink general manager Scott Gallacher said.
"This move, quite rightly, focuses on bus drivers and the essential part they play in keeping our region moving every day. We are incredibly lucky to have some of the most amazing and committed people working across the Metlink network."
"It'll be for all operators eventually, and it will be across the board - it will be the base rate for any collective agreements."
O'Sullivan said it would also address chronic staff shortages.
"Lots of people are leaving the industry, and it will help address a lot of issues apart from take-home pay."
The move was welcomed by the Living Wage Campaign, which has been advocating for all public service workers to receive the living wage for some time.
Campaign national chair Gina Lockyer said being paid those few dollars per hour extra made all the difference.
"When people are earning below the living wage, there are many difficult choices that they face, lots of different choices around whether they need to work more hours just to meet basic costs like rent.
"We know that when people are paid the living wage those barriers, those choices, are opened up."
They want to see more cleaners and security guards working for the public service also on the living wage.
The campaign had focused on the public service, Lockyer said, because it would set a good example for private companies to follow.
"We see that ripple effect, and the fact that the Regional Council have decided to do this sets an example of leadership for everybody."
The plan is for other regions to also see similar pay increases, and Transport Minister Michael Wood said that was being worked on.
"I think we all have a view that bus driver terms and conditions haven't been good enough for a long time - that's not good for the people concerned, and it's led to a workforce problem in terms of attracting people into the profession.
"I've been meeting with unions, with employers and with Waka Kotahi over recent weeks to look at how we can move towards a wider rollout of the living wage in the sector, and I hope we'll make further progress within the year."
How much the deal will cost and exactly where the money will come from is still to be finalised, but it will be split between Waka Kotahi Transport Agency and the Regional Council.
There were disruptions to several Wellington city services earlier this week as members attended the union meeting in the suburb of Kilbirnie.
