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It will be paid for with a $1.8 billion boost in Vote Health funding, and an extra $192 million in Accident Compensation Corporation funding.
ACC levies may rise as a consequence, and paying rest-home residents will probably face a fee increase.
Some providers are still anxious about costs, despite the Government agreeing to the massive funding boost.
The pay rise - and funding boost - will be phased in over five years.
Experienced caregivers would receive hundreds of dollars extra per week from July, when the top rate of pay will be $23.50 per hour, and the minimum pay would be $19 per hour.
In mid-2021, the top rate for experienced carers would increase to $27 per hour and the minimum would be $21.50.
Health Minister Jonathan Coleman said yesterday he would introduce legislation to Parliament soon to ''ensure the pay rises happen in the agreed manner''.
The settlement - which is subject to worker ratification - affects workers in the aged-care and disability sectors.
It involves 22,000 aged residential caregivers, 24,000 home and community support workers, and 9000 community residential support workers.
Their current average hourly rates are $16.65 per hour, $16.22 per hour, and $17.72 per hour respectively.
''From July 1 this dedicated and predominantly female workforce, who are mostly on or around minimum wage, will receive a pay rise between around 15% and 50%, depending on their qualifications and or experience,'' Dr Coleman said.
It was also possible there would be fee increases of $60-$100 a week for about 11,000 people in rest-homes whose assets were over the $220,000 threshold to qualify for any Government subsidy - one-third of the 33,000 in rest-homes.
Current residential care rates were $884-$971 a week.
''You can't have such a massive wage rise across such a huge group of workers without there being some uplift in costs right across the board.
''This will be worked through in the annual aged residential care contract negotiations in June.''
The Government opted to settle with unions out of court after the TerraNova gender pay equity case brought by Etu union on behalf of care worker Kristine Bartlett successfully argued its case in the courts. There were hopes of a resolution about a year ago, but the negotiations became drawn out, taking 20 months.
The new pay rates will cover all workers in the affected groups, not just union members.
New Zealand Disability Support Network (NZDSN) chief executive Garth Bennie was concerned about the financial flow-on effects.
NZDSN represented disability sector employers in the negotiations.
Dr Bennie said the value of staff accrued leave would increase dramatically in some organisations.
''And how will employers address the fact that many support workers will find themselves on higher rates than the people who supervise and manage them?
''We want to make absolutely certain that these overdue pay increases do not create bigger problems for providers already stretched trying to make their contracts work,'' Dr Bennie said.
New Zealand Aged Care Association chief executive Simon Wallace was happy with the outcome.
''We're pleased that after several years of uncertainty that we've now got a resolution.''
Mr Wallace said the industry body had always supported higher wages for workers, but opposed the TerraNova case because of fears over affordability.
Following the Government's agreement to inject money, the industry was satisfied with the outcome.
It could be a ''game changer'' by making the industry more attractive to workers, Mr Wallace said.
The pay increase opened up relativity issues for enrolled nurses, and to a lesser extent registered nurses, and those would have to be addressed by employers, Mr Wallace said.
Home and Community Health Association chief executive Julie Haggie said the pay rise would motivate workers to gain qualifications.
''It will lead to a well-trained, better paid and more stable care workforce.
''Home support organisations currently provide services to over 110,000 clients, many of whom live with major health challenges, or significant disabilities,'' Ms Haggie said.
The sector had suffered from low levels of funding making it difficult to pay decent wages.
''Legislation will now lock providers into responsibility for paying workers according to the new pay scales, so employers will be keen to learn more about the funding package and to know that there will be sufficient funding to pay for wage uplifts,'' Ms Haggie said.
Unions released a joint media statement yesterday celebrating the ''huge win''.
It commended the Government for agreeing to negotiate, rather than ''waiting for years before the legal process was finally exhausted''.
Care and support workers would vote on the proposed settlement in the coming weeks.
Etu assistant national secretary John Ryall said the offer was a ''once in a lifetime pay rise'' to end ''poverty wages'' in the sector.