The breakthrough came following the talks the junior doctors held with the state medical education minister K Murali Mohan in the wee hours today.
"The minister gave us an assurance of hiking the stipend from April 2012. We were flexible on the issue of increasing the stipend, but we stressed on improving the infrastructure in hospitals in the interest of public health," a leader of the Junior Doctors' Association told reporters after the talks.
According to him, the government gave assurances on upgrading the emergency departments in the hospitals by spending Rs 65 crore over the next four months.
The government has also agreed to upgrade the casualty wards in the teaching hospitals over the next few months by providing various facilities, he said.
The government is also ready to improve library facilities for the medicos and also ensure transparency in conducting entrance exams for the post-graduate courses, he said.
Saying that the government is committed to public health, the minister appreciated the medical students' move of calling off their agitation.
The medicos had begun their agitation about a month ago over 13 demands. They were on strike and also boycotted emergency services in the last few days, as part of their agitation.
They had held talks with the government several times earlier, which had failed to resolve the issue.