The Nova Scotia Government and General Employees' Union has reached a contract settlement with the Capital Health District affecting 2,460 nurses.

Nurses will get almost an 11 per cent pay raise over the life of the deal.

They will receive increases of 2.9 per cent in each year dating back to Nov. 1, 2006, and 2.1 per cent as of April 1, 2009.

There are also provisions in the contract aimed at trying to retain experienced nurses. The contract provides that when nurses reach 25 years in the profession, they will get an automatic 3.5 per cent salary increase.

Also, for every year nurses stay in the profession past the 25-year mark, they will get another two per cent increase.

The deal was formally announced Friday afternoon.

Nova Scotia Minister of Health Chris d'Entremont is happy the two sides have reached an agreement.

"It's good to see that the collective bargaining process has worked. Of course, the details haven't be shared with the union membership yet and I look forward to a positive answer from them," he said.

d'Entremont is hoping an agreement with other nurses will soon follow.

Three days of contract talks with nurses who work in institutions outside of metro Halifax end Friday.

The Nova Scotia Nurses' Union represents 5,700 registered nurses, licensed practical nurses and nurse practitioners.

In October, the minority Tory government proposed a bill to take away the right to strike from health-care workers.

Under the proposed bill, health-care unions would continue to bargain and use mediation. But if contract talks break down, the two sides would have to opt for some form of third-party arbitration instead of proceeding with a strike or lockout.

Premier Rodney MacDonald tabled the bill, but later withdrew it when it was clear neither the NDP nor Liberals would support it.

At the time, union leaders said they believed the premier had pressed ahead with the legislation because nurses were in the middle of negotiating a new collective agreement.