Around one million public sector workers will benefit from the biggest pay rise in almost 10 years, including 2.9% for the armed forces, 2.75% for prison officers and 3.5% for teachers, the Government has announced.
The move confirms last year's scrapping of the 1% pay cap and follows campaigns by unions for higher wage rises.
The Government said the increases were affordable within its spending plans.
Ministers said members of the armed forces will receive an increase of 2.9% (2% consolidated, 0.9% non-consolidated), with Tuesday's award worth £680 in pay to an average soldier, plus a one-off payment of £300.
The teachers' award means the main pay range will increase by 3.5% (2% to upper pay range and 1.5% to leadership). Schools will determine how it is set.
All prison officers will get at least a 2.75% (2% consolidated, 0.75% non-consolidated) increase this year, with many getting higher awards.
A police award of 2% will mean average pay for a constable will now be more than £38,600 a year.
A pay increase of at least 2% will be given to junior doctors, specialist doctors, GPs and dentists. Consultants will also get a pay rise of at least £1,150.
Ministers said teachers are in line for a pay rise of up to £1,366 a year.
Education Secretary Damian Hinds said there will be an investment of £508 million to fully fund the deal.
He said: "There are no great schools without great teachers and I want to us to recruit and retain brilliant teachers who are fairly rewarded for the vital work they do.
"Today we are announcing a fully funded pay rise of up to 3.5% - or between £800 and £1,366 - for classroom teachers on the main pay range, 2% for those on the upper pay range and 1.5% for those in leadership positions.
"This will mean that teaching continues to be a competitively rewarded career, and I will continue to work with the profession, Ofsted and the unions on issues like excessive workload, professional development and flexible working, to make sure teaching remains an attractive, fulfilling profession."