The strike would have disrupted travel plans on the night of one of the biggest pop concerts Northeast has been canceled.
RMT union members were due to leave on Wednesday when thousands of people will be at the Stadium of Light in Sunderland for a direction.
The dismissal of an employee was followed by the Metro operator DB Regio .
The union said that all industrial action has been canceled after it reached an "acceptable agreement".
Nexus, which owns and manages the Tyne and Wear Metro, said the strike was suspended this morning after fresh talks between the RMT union and DB Regio.
Deputy Director General of Nexus, Tobyn Hughes said: "I am happy that the strike has been called off Common sense has prevailed and a day of great distress to thousands of our customers have been avoided ...
“Metro services will now operate as usual tomorrow and still have additional services for One Direction concert in Sunderland.”
An RMT spokesman said management had “come around” and made an "acceptable" offer.
A spokesman for DB Regio said: “This is great news for all our passengers using Metro to travel, as well as those traveling to the One Direction concert at the Stadium of Light.”