German services union ver.di said it was calling off a strike planned Monday at Lufthansa's catering subsidiary LSG Sky Chefs, which provides on-board meals for hundreds of airlines.
The walk-out, which would have hit airports in Germany, was cancelled after Lufthana "made an improved offer at short notice", the union said in a statement.
On Saturday, it had called the strike while accusing Lufthansa of failing to secure pay guarantees for LSG staff as the catering unit's European operations are sold to Swiss-owned Gategroup.
LSG Sky Chefs is the world's second biggest flight caterer, providing meals for 300 airlines.
On Tuesday, Lufthansa said it would sell the subsidiary's European operations to Gategroup, without giving financial details.
Ver.di said representatives would meet with Lufthansa Wednesday for a new round of negotiations when it hoped the airline would "take social responsibility for around 7,000 employees affected" by the sale.