Nautilus International members will be advised to cease industrial action, following an update from the Steam Packet indicating it would withdraw notice issued in December.
Negotiations between the union and the Steam Packet will continue.
Notice letters issued just before Christmas reportedly informed staff that they would lose their jobs unless they agreed to new terms and conditions as part of a plan to implement a 'live on board' policy for Manxman crew.
A spokesperson for Nautilus said: 'Nautilus International notes the update provided by the Isle of Man Steam Packet Company on negotiations, re-confirming that they will withdraw termination letters following discussions facilitated by the Manx Industrial Relations Service.
'Members operating lifeline ferries to the Isle of Man voted for strike action and action short of a strike over management threats to force through contractual changes that would significantly reduce time ashore with loved ones in a ballot that closed on December 18.
'From December 27 at 6pm Nautilus members refused to work overtime, or work in positions outside of their contracted rank.
'From January 3 IoMSPCo was forced to introduce a contingency sailing schedule with Manxman sailings cut to one a day for the next two weeks because of unexpected short staffing.
'Nautilus has maintained its willingness to discuss a resolution to the action short of strike on behalf of members and has encouraged management to make a genuine offer that is acceptable without the threat of fire and rehire.
'The union had proposed further discussions with Steam Packet starting 15th January 2024 in Douglas which have been agreed.
'Upon confirmation that notices have been withdrawn by the employer, Manx Sea Transport Guernsey Limited, Nautilus members working onboard Steam Packet vessels will be advised to cease industrial action.
'Whilst discussions continue, we expect the employer to honour the status quo whilst we conclude a negotiated position. We also expect the employer to abide by the Collective Bargaining Agreement and commit to arbitration should these latest talks fail to find an agreement.'