Both sides met yesterday in a bid to reach agreement on reversing the cuts implemented during the financial crisis.
It's understood public sector workers are in line for a 1,000 pay increase next year – in return for further reforms and changes in work practices – and an extension to the Haddington Road agreement.
Talks continued into the early hours of this morning and were adjourned at around 2am – but unions say substantial and positive progress has been made.
Both sides will meet again at the Labour Relations Commission at 10 o'clock this morning.