"A compromise has been found," says Waldemar Drosdziok of the IG Metall union. "Both sides emerge as winners."
The strike had initially been called over a wage dispute, though the resolution reached includes job guarantees until 2011.
In return, the unions accepted a 28-month pay freeze and a one-off payment.
Under the terms of the agreement, VW workers will get a one-off payment of €1,000 (£694) each in March in return for freezing their pay until the end of January 2007, and have a pledge of job security until 2011.
VW had sought a two-year pay freeze and a 30% cut in labour costs by 2011. IG Metall had been seeking a pay rise of up to 4%.