After months of wrangling, New York City Ballet and the union representing its musicians announced on Tuesday they had reached a deal for a new contract.

The three-year contract, which is expected to be ratified by members of Local 802 of the American Federation of Musicians, includes an increase in compensation of about 22 percent over three years, a central demand of the musicians, who had argued that they were underpaid because of salary cuts made during the pandemic.

City Ballet and the musicians’ union praised the agreement, which came just after the company began its holiday run of “George Balanchine’s The Nutcracker,” typically the most lucrative production of the season.

“The marriage of music and dance is a hallmark of N.Y.C.B.,” the company and the orchestra said in a joint statement. “We are thrilled that this agreement has been finalized and we look forward to a successful season featuring our wonderful musicians and dancers who are among the greatest performers in the world.”

The contract was the first that City Ballet and the orchestra have negotiated since the coronavirus pandemic, which forced the cancellation of hundreds of performances and the loss of about $55 million in ticket sales. City Ballet, like other cultural institutions, reduced the salaries of dancers and musicians as it worked to weather the crisis.

Under the deal, the company will restore a salary cut of about 9 percent made during the pandemic, as well as offer a raise of 13 percent over three years.

The deal also involves changes to the health care plan. City Ballet and the orchestra did not offer more details, saying only that the plan would “continue to be funded by N.Y.C.B. while also providing the musicians with greater independence to choose their own plan.”

The dispute between City Ballet and its 63-member orchestra had grown heated in recent months. The discord at times spilled into public view and became a persistent distraction as the company celebrated its 75th anniversary season with galas and starry gatherings.

In September, before the start of the season, the musicians of the orchestra voted to authorize a strike, if needed. When performances began, they wore pro-union shirts with the words “Fair Contract” in the orchestra pit and staged rallies outside City Ballet’s home, the David H. Koch Theater at Lincoln Center.

The orchestra argued that City Ballet was in strong financial shape — attendance has been robust and its budget has grown since the pandemic — and should reward its musicians accordingly. City Ballet’s management accused the union of spreading misinformation and said the musicians’ demands were unrealistic and would put the company in financial danger.

The deal with the orchestra comes a year after City Ballet reached a similar three-year deal with its dancers that included raises as well as the restoration of some benefits that were halted during the pandemic.

Musicians at other leading ensembles have secured significant pay raises in recent months through contract negotiations, including at the Philadelphia Orchestra and the Boston Symphony Orchestra.