Some 170 members of Unite began strike action in mid-October, but a new pay deal was offered after Unite announced that the workers would take all-out industrial action from the end of November, potentially causing chaos to festive travellers.
West Midlands Metro said it will now be running a full and frequent service during the festive season with extra trams at peak times.
Ray Harris, service delivery director at West Midlands Metro, said: “Trams are now running to all stops between Wolverhampton and Edgbaston Village with the entire Metro team focused on delivering a safe, secure, reliable and sustainable service in the run-up to Christmas and beyond.
“As the region’s roads get busier, the Metro offers the ideal alternative to taking the car as people begin to head for attractions such as the Christmas fair in Wolverhampton, German market in Birmingham City Centre and nearby shops, bars and restaurants.
“A frequent and robust service will be in operation seven days a week from 4.28am and approximately 1.30am to get customers moving in the run-up to the holidays.”
The new pay deal, which members of Unite have accepted, will see existing tram crew with 12 months of service or longer have their pay increase by 20.1 per cent by April 2023, with 15 per cent of the increase backdated to June 2022.
New tram crew will see their wages increase by 13.7 per cent by April 2023 and all other grades on the West Midlands Metro will see their pay increase by 10.25 per cent.
As part of the deal, the pay anniversary date, when pay increases are due to be paid, has moved three months from June to April.
The employer has also committed to a review of tram crew pay in the summer of 2023.
Union bosses said it was a "hard won victory".
It comes after a disastrous year for the company, as services were halted on three separate occasions in just nine months due to cracks in the trams.