Mayor Bill de Blasio announced a “landmark” labor deal on Thursday with New York City’s largest teachers’ union, the New York Times is reporting. The deal will set the framework for other outstanding contracts with the municipal workforce, officials said.

The teachers’ union known as the United Federation of Teachers has been without a contract for four and a half years during former Mayor Michael R. Bloomberg’s tenure in office and must ratify the agreement.

The deal grants $3.4 billion in back pay to the union, in exchange for a substantial reduction in health care costs and an easing of classroom work rules. Teachers will also receive raises totaling up to 10 percent over seven years.

Mayor Bill de Blasio hailed the deal as a victory for educators and tax payers, though it is still unclear if the city will have savings from the reduction in health care costs. Officials said that if other teachers’ unions agree to the same deal with a reduction in health care costs, the city will save $3.4 billion, off-setting the back pay given to the union.

In addition, Mayor Bill de Blasio said the agreement would increase teacher retention, while staying within the city’s budget. It’s a stark contrast in negotiating tactics when compared to his predecessor Mayor Michael R. Bloomberg, who promoted pay freezes and other stringent tactics.

The substantial reduction in health care costs without raising premiums comes from an idiosyncratic approach, according to city officials, such as increased use of prescriptions by mail, which saves money in the long-run. The hope is that the other 151 municipal bargaining units that have open contracts with the city will adopt a similar approach.

This is Mayor Bill de Blasio’s first year in office, and city officials hope that this agreement with the United Federation of Teachers will set the tone for other agreements during his tenure in office.

The agreement is expected to stretch over nine years, which is substantially longer than the most recent municipal contracts in New York, and a way city officials hope to spread the impact of the wage increases over many years’ worth of budgets.

But it’s still unclear if the savings generated by a substantial reduction in health care costs will materialize.

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