With reporting by Zach Buchheit

SPRINGFIELD-Gov. Pat Quinn and state government's largest employee union struck a three-year deal Thursday that will give 35,000 state workers no pay increases the first year and 2-percent increases during each of the next two years.

Those details, confirmed by two sources familiar with the tentative deal, were a key part of a settlement between the governor and American Federation of State, County and Municipal Employees Council 31 that was reached at about 1 a.m. Thursday.

The proposed agreement, which still must be ratified by the union, ends a 15-month stalemate between AFSCME and a governor it helped to elect in 2010.

"At a time when the state is facing unprecedented financial challenges, this agreement is fair to both hard-working state employees and all taxpayers of Illinois," Quinn said in a prepared statement. "I want to thank the women and men who have stayed at the table for more than a year for their commitment to reaching an agreement."

The union's chief sounded a similarly upbeat tone in describing the settlement, which brought to an end the longest negotiation in state history.

"AFSCME is very pleased that we were able to reach an agreement that protects our members' standard of living, and is fair to them and all Illinois citizens, even in these very challenging economic times," AFSCME Council 31 executive director Henry Bayer said.

The union intends to take the deal to its members, and the ratification process will get underway during the week of March 4, AFSCME's statement said.

Quinn and the union have been negotiating for a new collective bargaining agreement for more than a year and had agreed to extend the terms of a state contract that expired last June. However, the governor's administration announced in November that talks had stalled and the contract was left untouched.

The Quinn administration had rejected the union contract in a spat over retirement health insurance and $60 million in unpaid wage increases that Quinn had previously promised. The conflict persisted even as the state had claimed it extended the union's contract three times over the previous 11 months.

In December, a Cook County judge ruled in favor of AFSCME in the pay dispute with Quinn's administration, determining that the state must pay wages to 30,000 state workers that the governor withheld since July 2011.

The governor had promised pay increases to state government's largest employee union but then pulled back, saying the General Assembly had failed to appropriate enough money to cover the pay increases the administration negotiated with the union - a point upon which Cook County Circuit Judge Richard Billik conceded.

But Billik nonetheless ruled the state is bound by the contract Quinn's administration negotiated with AFSCME and even if the funds don't exist now, workers eventually must be paid what they were promised.