The union representing NSW public servants has accepted a government wage cap after six months of strikes and court action, Treasurer Mike Baird says.

Mr Baird said the decision by the Public Service Association (PSA) on Tuesday to accept the 2.5 per cent cap on salary increases was good news for the state.

"It has been a long-running dispute, certainly we've seen court action, we've seen strikes, but today we have seen sense and reason," he told reporters in Sydney.

"Ultimately we think it is the wages policy working, because it is fair, it is affordable, and we certainly think it is a good outcome overall for the state."

The pay fight led to prison officers, school support staff, park rangers, child protection workers, disability workers and civilian police staff walking off the job last year, even after the Industrial Relations Commission ordered the PSA not to strike.

The High Court in December dismissed the PSA's challenge of the cap.

Mr Baird said the union and government had enjoyed "constructive" negotiation after the election of Anne Gardiner as PSA general secretary in November.

"I think fresh leadership can bring fresh eyes to a problem, and certainly that's what we've seen," he said.

Comment is being sought from the PSA.


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