The union and the federal government reached the agreement on Monday, after a two-hour meeting in Abuja.
The government agreed to release N15.4 billion in salary shortfall for the University teachers.
The union is expected to call off its indefinite strike action any time from now.
Chris Ngige, the minister of labour and employment, who disclosed the news of the agreement said President Muhammadu Buhari has released N15.4 billion to cover the shortfalls in public universities.
According to him, the accountant general and the ministry of finance have confirmed the release of the funds.
He said President Buhari has approved N20 billion for settling outstanding arrears from 2009 to 2012 due to the universities.
The staff union has been on strike action for two months running.
Biodun Ogunyemi, a professor and the ASUU national chairman, said the union will meet and decide if the concession by the government is enough to call of the strike or not.
The final decision of the striking lecturers will be communicated to the public after the said meeting.