Sydney train strike called off after NSW government reaches deal with union

A planned three-day shutdown of NSW's urban and inter-city rail network has been cancelled.

More than a million people use Sydney trains on a typical day. Source: AAP / Bianca De Marchi

A shutdown of Sydney's train network has been averted after a last-minute deal was made between the NSW government and rail union.

Trains from Newcastle to Wollongong and across Sydney were due to lay dormant from Friday morning until Sunday morning amid an escalating pay dispute between the government and rail workers.

It would have been the largest rail shutdown in living memory and caused commuter chaos and an estimated $50 million dent in the economy.

But after hours of negotiations on Thursday, the state government reached an agreement with the Rail, Tram and Bus Union (RTBU) to drop the strike to allow for two weeks of negotiations.

As part of the deal, the government agreed to the union's demand to run 24-hour train services this weekend. in return for no work bans.

Sydney's planned rail strike has been averted. Source: AAP

But it won't involve all lines, with some to close overnight to enable track work.

Train services were operated around the clock last weekend to ward off stop-work bans.

NSW Premier Chris Minns said it wasn't possible to run 24-hour trains "every weekend, forever".

"The main reason for that is that so much of the maintenance and repair of the transport system operates because people are incredibly hardworking and their job starts at two o'clock in the morning when the [trains] shut down," he told reporters in Syndey on Friday afternoon.

Pay negotiations for rail workers to continue

The action comes against a backdrop of the union's demand for 8 per cent annual pay rises.

The government said anything more than 11 per cent across three years was unaffordable.

Minns said "intensive bargaining" between the government and unions would begin over the next fortnight, with the aim of reaching a long-term agreement.

"We've landed this one today, we've got a lot of work to do in the next two weeks to get one up that is more permanent," he said.

"It would have been great to get a long-term agreement negotiated in the last 48 hours. We ran out of time and neither side was prepared to let commuters suffer as a result of that."

More than a million people use Sydney trains on a typical day.