Although no details have been released, it is understood that the United Auto Workers union has agreed to see hourly wages reduced from $27 to $18.50.
The deal will come as a major relief for General Motors (GM), Delphi's former parent and main customer.
Any strike by Delphi workers would have quickly hit production at GM plants.
Although the agreement still needs to be ratified by Delphi workers, analysts say this is all but a formality.
"We believe this agreement will be a significant milestone in our transformation and a major step towards emergence," said Delphi's chief restructuring officer John Sheehan.
Spun out from GM in 1999, Delphi filed for Chapter 11 US bankruptcy protection in 2005 after racking up huge losses.
Handicapped by high wages and generous healthcare and pensions provision, Delphi has also been affected by cheaper competitors from China and other Asian nations.
GM's own problems
The settlement between Delphi and the United Auto Workers (UAW) comes after more than 20 months of tough discussions, which also included GM representatives.
GM was involved not just because it remains Delphi's main customer, but also because it has had to financially prop up its former subsidiary.
The carmaker estimates that the difficulties at Delphi have cost it more than $7bn (£3.5bn).
GM, which is itself trying to turn around its fortunes after making large losses, now has to seek its own agreement with the UAW.
Chapter 11 bankruptcy projection gives a US firm time to restructure its finances while protected from its creditors.
