SYDNEY, Australia (AP) _ The state government and transport workers agreed Friday on pay increases that should avert strikes during the Sept. 15-Oct. 1 Sydney Olympics.

Bus and train drivers, signal workers, guards and station staff accepted an increase of $2.40 per hour for the duration of the games in exchange for working flexible hours.

State rail chief Ron Christie said the agreement would cost the government $9.6 million.

The increase reflects the extra stress that transport workers face during the Olympics, when the government has promised to provide 24-hour public transport, said state Labor Council executive Michael Costa.

The workers had threatened to paralyze public transport during the games _ by sticking strictly to regular working hours _ unless the government met their demands

The transport workers' agreement is separate from a proposed special Olympic allowance that is still being negotiated with 8,000 public servants, including police and nurses, whose work or family life will be disrupted by the games, Costa said.