The executive board of the city's mass transit system approved a new labor contract Saturday, clearing the way for all bus and train service to resume Monday morning.

Striking bus drivers, train operators and mechanics had overwhelmingly approved the contract Friday.

Under terms reached Wednesday during a session with a federal mediator, workers would get a wage increase of $1.80 an hour over three years but would receive 50 cents an hour retroactive to March 1 with smaller increments in quarterly payments through Dec. 1, 2008.

The agency would increase its contribution to health insurance by an additional $20 a month and pay more into a health-and-welfare trust fund.

Nearly 1,750 members of the Amalgamated Transit Union Local 1001 walked off the job Monday after rejecting a previous proposal that offered a wage hike of $1.80 an hour over three years in 15-cent raises every quarter, plus increases in health benefits contributions.

Although the transit agency operated about 45 percent of its overall bus service during the strike, thousands of commuters resorted to alternate transportation to get around. The additional traffic clogged major interstates and some downtown parking lots even raised rates.