The strike, which involved an estimated 7,000 grocery workers in Northern and Central California, started Nov. 4 when Raley's officials imposed the company's "last, best and final" contract proposal after 15 months of negotiations.
Raley's spokesman John Segale said the two sides returned to the bargaining table on Saturday and worked for three straight days before reaching the tentative agreement early this morning.
"We're very excited about this agreement because it will help Raley's remain competitive in the years ahead," Segale said.
He said the 80 Raley's and Nob Hill stores in Northern California that were affected by the strike remained open during the walkout.
United Food and Commercial Workers union leaders said in a statement that they will submit the settlement agreement to their members for review and recommend ratification.
Jacques Loveall, the president of UFCW 8-Golden State, and Ron Lind, the president of UFCW Local 5, said picket lines would immediately be withdrawn from all Raley's and Nob Hill stores.
In the statement, union leaders said the strike settlement guarantees that when workers return to their jobs, there will be no retaliation for exercising their rights.
Workers will maintain their positions, seniority and health care eligibility and all replacement workers will be immediately discharged, Loveall and Lind said.
The union leaders said the details of the settlement will be released to the members before they are given to news media.
Union officials said Raley's has agreed to retain and fund employees' health plan, which they said is the same plan agreed to by the Save Mart and Safeway grocery companies.
Loveall and Lind said in the statement, "This is an important accomplishment for our members and retirees. We were able to address Raley's competitive concerns while protecting our membership in a very challenging time."
They said, "We now look forward to returning to work and serving our loyal customers."
When the walkout began, Segale said Raley's needed to cut costs in a "fiercely competitive" market. He said the Sacramento-based chain, which includes Raley's, Nob Hill Foods and Bel Air stores, has closed five stores in the past year and seen the opening or expansion of 240 non-union stores in its markets since 2008.
Raley's and Nob Hill Foods have more than two-dozen stores in the Bay Area.