Nurses and midwives in NSW have agreed to a four per cent pay increase, but many maintain the deal does not fairly reflect their contribution to the health system.

It comes amid threats of further industrial action by paramedics who last week effectively rejected an identical offer.

Members of the NSW Nurses and Midwives Association voted 58 per cent in favour of taking the deal, which was confirmed on Monday evening following lengthy negotiations and several heated strikes in recent months.

The deal will be back-paid to July 1 and will include an additional 0.5 per cent bump to superannuation.

It is the biggest pay increase for the group in more than a decade and comes after the government scrapped a three per cent cap on public sector pay rises, which will formally end in September.

The union's assistant general secretary, Michael Whaites, said the agreement fell short of a targeted 10 per cent bump and negotiations would continue for future increases.

"Accepting the one-year offer was a reflection that they will take the four per cent now, but more is needed," he said.

Premier Chris Minns acknowledged household budgets are under pressure and said the hope is inflation will ease over the next 12 months.

"Inflation is running at six per cent - it's at 6.9 per cent in Sydney - the highest we've seen in decades and as a result of that everybody is under pressure," Mr Minns said.

"Those that work for the NSW public sector, their pay is not stretching as far as it usually did. We acknowledge that."

Last month, the Public Service Association which represents more than 80,000 NSW public sector workers including school support staff and prison officers, accepted an overall 4.5 per cent pay bump.

The Health Services Union (HSU) NSW also agreed to a $3500 annual pay boost and 0.5 per cent superannuation bump for 70,000 of its members including hospital cleaners, wards people and security officers.

Paramedics with the HSU last week deferred deciding on a four per cent pay rise put forward by the government, with the union threatening to ramp up strike action unless professional recognition is achieved.

"We are headed towards a cliff and industrial action will escalate," HSU NSW secretary Gerard Hayes said.

Industrial Relations Minister Sophie Cotsis said the wages cap had eroded trust between essential workers and government and created a staffing crisis Labor was attempting to fix.

"The wages cap is dead," Ms Cotsis said.

"The people of NSW deserve world class public services. We will continue to keep people at the heart of all of our work."