The decision came after lengthy talks with labour unions and following Sunday's peaceful demonstrations across the country where tens of thousands of people called for more democracy and social justice.
The rally was the third since February 20, Morocco's first countrywide protests that came amid the wave of popular uprisings that swept across the Arab world.
Rabat plans to hike net salaries of public employees by 600 dirhams (77 dollars, 50 euros) as well as the minimum retirement pension to 1,000 dirhams from 600 dirhams, union leader Abdelmalek Aferyate told AFP.
Moroccan Prime Minister Abdelmalek Aferyate told AFP.said he "greeted the climate of sincerity and the strong will shown by the unions...of defending the interests of the working class" in comments ahead of Tuesday's talks.
Aferyate said that the wage increase was in the interests of employees, but added that there needed to be more formal links with the authorities.
In a March 9 speech, King Mohammed VI announced major political changes to increase judicial independence and the separation of powers. The next day, he established a commission tasked with proposing changes to the constitution by June.
Two weeks ago, the king pardoned or cut the sentences of 190 detainees, including Islamist and Sahrawi political prisoners.