After two days of nearly nonstop negotiating, Port Authority and union officials announced tentative accord on a new three-year contract yesterday morning, apparently averting the threat of a walkout that could have hamstrung commuters and clouded the holiday shopping season.

"The good news is that we've avoided a strike," Gov. Ed Rendell said as the parties emerged to announce the agreement shortly after 7 a.m. at the State Office Building, Downtown. At the request of the negotiators and county Chief Executive Dan Onorato, Mr. Rendell flew to Pittsburgh to join the talks late Friday night.

If the Port Authority board and the union members accept the agreement, as expected, the transit agency will avoid fare increases and service cuts at least through December 2007 for 260,000 weekday riders.

Ratification also makes moot a strike authorization vote by Local 85, Amalgamated Transit Union, and a possible walkout on Black Friday, the day after Thanksgiving that ushers in the Christmas shopping season.

Instead, when Local 85 holds membership meetings at 10:30 a.m. and 8 p.m. today at Soldiers & Sailors Memorial Hall, Oakland, Local 85 President-Business Agent Patrick McMahon said they will be discussing the contract proposal and then voting.

"There are definitely issues that our people are going to be uncomfortable with," he said, as a result of the marathon give-and-take bargaining. "In the end, I think they'll be supportive."

The authority's governing body, a nine-member board of directors, will hold a special meeting at 11 a.m. Monday to vote on the proposed settlement.

Port Authority Acting Chief Executive Officer Dennis Veraldi credited the governor and Mr. Onorato for helping to shape the final proposed agreement. The two public officials announced they would intervene about two weeks ago after little progress had been made since the previous contract expired July 1 and the threat of a strike loomed.

The proposed contract includes 3 percent wage increases in each of its three years while calling for employees to contribute 1 percent of base wages to their health insurance premiums, a provision that will be extended to management personnel as well as 2,300 bus-trolley operators, mechanics and other hourly workers covered by the pact.

Acknowledging that the health care contributions would be a first for the membership, Mr. McMahon said, "We think the members can live with it. We think it's a responsible contract."

The authority's top operators now make $21.53 an hour and their average pay is $49,429 a year, a figure that includes overtime, holiday pay and shift differentials.

In earlier stages of the bargaining, the authority had suggested a four-year contract with an initial salary freeze and raises of one percent in each of its final two years. The union had countered with a call for a series of raises that would add $5 to its members' hourly rate by the end of a three-year pact. A fact-finder's report, rejected at an early stage in the talks, had proposed a 1 percent contribution for health care while management, in its initial bargaining, had sought a 5 percent contribution.

A Port Authority spokesman could not immediately supply a precise figure for the cost of the salary hikes and said details would not be forthcoming until both the board and Local 85 accept the contract.

But officials said a combination of savings and higher state subsidies that Mr. Rendell promised would amount to $25.5 million for the financially strapped authority. It avoided service and job cuts and a fare hike this year, as it did the previous year, only after the governor "flexed" $412 million in highway funds to rescue transit statewide -- $113.4 million extra for the Port Authority.

The authority's $319.8 million budget for the 2005-06 fiscal year, passed in June, was predicated on achieving $19 million in cuts and savings for this year alone, a deficit that some believe was inflated.

The settlement mirrors some of the chief features of a recent transit contract at the other end of the state, where workers at the Southeastern Pennsylvania Transportation Authority ended a week-long strike after talks in which Mr. Rendell also played a major role.

While the two contracts are not directly comparable, they both include 3 percent salary increases each year and 1 percent contributions toward health insurance.

The Port Authority agreed to drop a proposal to privatize some maintenance functions and other traditional union work.

Also, a new, less liberal pension plan will be put into place for future hires but the existing plan will remain in effect for current employees, enabling them to retire after 25 years of service.

"The union has a far too rich pension plan compared to other transit systems, but now was not the right time to make the changes that management sought," Mr. Rendell said last night. "To go through a two- to three-week strike on that issue would have been a hollow victory."

The authority could not immediately supply precise figures on the cost of the salary increase and the financial impact of other items in the proposed agreement.

Nonetheless, officials maintained the two contracts would strengthen the arguments of the Port Authority, SEPTA and six dozen other transit agencies across the state in their long-term quest to have the General Assembly legislation providing a dedicated, long-term source of funding for public transit.

"It's a real plus when the Legislature looks at this," Gov. Rendell said.

Both Port Authority and labor negotiators credited the participation of the governor and Mr. Onorato for helping the parties reach the tentative accord.

The two politicians met with the both sides Wednesday night in separate sessions in the Sheraton Station Square. Kevin Evanto, Mr. Onorato's director of communications, said the county chief executive monitored the talks over the next two days, while county Manager Jim Flynn took a direct role as the two sides continued to try to bridge their divide.

"Dan was up for two straight days," Mr. Evanto said, participating in the marathon schedule shared by union and management negotiators who met for more than 47 hours with only short breaks.

Mr. Onorato called the governor, who was in Philadelphia early Friday night, and asked him to return to Pittsburgh to join in the talks. Mr. Rendell quickly flew back to Pittsburgh and with Mr. Onorato, rejoined bargaining at about 9 p.m. Friday night.

Mr. Onorato said the stability promised by the agreement represented a welcome turnaround from the atmosphere imposed by the prospect of a strike. He noted that after a 28-day strike in 1992, it took the agency almost a decade to recover.

"Everyone would have lost if there had been a strike," Mr. Onorato said, citing commuters, employers and retailers. A work stoppage would also have interrupted the agency's momentum in gaining ridership during a period of high parking fees and gasoline prices.

Mr. Rendell said a strike at a time that ridership is on the upswing "would slow the momentum of mass transit ... cut it off at the knees at the wrong time."

Mr. Onorato said the $25.5 million would be accounted for this way: $7.5 million in savings in health care costs; $6 million in updated actuarial assumptions for pension plans (higher investment returns mean lower authority contributions); $3 million in savings through Medicare's new Part D prescription program; and an extra $9 million in state subsidy payments over the life of the agreement.

The governor pledged to advance state funds to allow the agency to pre-pay health premiums over the life of the pact, a move officials said would provide a significant discount in those costs.

The Port Authority still must reach a new agreement with a unit of Local 85 representing 187 first-line supervisors, whose contract expired Aug. 1. However, that contract typically follows what occurs with the main bargaining unit.

Last month, the authority reached agreement with two units representing a total of 43 members of the Port Authority Police Association. Both sides accepted a fact-finder's report that recommended wage hikes averaging 2 percent a year in a four-year contract.