The workforce was outsourced to contractor CAS Mining, who employed all miners as casuals.
Last year, union membership rose from 13 to 80 members over nine months, and an enterprise agreement was sought.
Workers started a strike at Wongawilli on Monday, and today the Construction Forestry Mining and Energy Union confirmed an agreement with management had been reached.
The deal includes a shift from casual employment to permanent employment; a 12% increase in the hourly rate; a 12.5% increase in the bonus rate and all entitlements to be paid by roster including superannuation, annual leave, carers leave, accident pay, and long service leave.
A two-year enterprise agreement will be signed with CAS Mining, that will include a 2% increase in pay over each year.
CFMEU Mining and Energy south western district vice-president Bob Timbs said the workers had gone from the lowest paid casuals in the region to permanent employees on pay and conditions consistent with the area.
CFMEU national president Tony Maher said the win pointed to a broader issue.
"The conversion of permanent, well-paid jobs into poorly-paid, insecure jobs is a huge issue right across the country," Maher said.
"What this win proves is that the trend is reversible. If labour hire workers join their union, if politicians flag the situation is untenable, then we can turn this around."
Meanwhile, the Fair Work Commission on Tuesday dismissed Wollongong Coal's application to terminate the EA at its Russell Vale Mine.
The pit has been on care and maintenance for several years, and there are no employees covered by the agreement.
The CFMEU argued the company was intending to terminate the EA, and then reopen the pit with a fully contractor workforce, similar to Wongawalli.
"The commission's decision reinforces our point: there is nothing inevitable about the slide toward casualisation," Maher said.