The deal was reached after a 12:01 a.m. deadline was extended, the Canadian Broadcasting Corp. reported.
Mark Ferguson, president of Canadian Union of Public Employees Local 416, called the talks "one of the toughest labor negotiations in Canadian history."
He said the union "had to give in a number of areas," though specifics had not been revealed.
Toronto Mayor Rob Ford said the outcome, however, means an "absolutely fantastic day for the taxpayers of this great city."
"I think the taxpayers are the winners here," Ford said. "We worked well with the union team, and I want to thank the union for working with us, and I want to thank our team for helping the taxpayers of this great city."
Terms of the tentative pact were not immediately disclosed and the negotiators are to be back at it Monday morning to finalize it.
The CBC said the city's pre-deadline offer was for lump-sum pay increases each year of a four-year contract, along with changes in job security provisions, scheduling rules and other areas. The union had offered to take a three-year wage freeze.
Notable deaths of 2014 [PHOTOS]