The agreement ends months of negotiations, which began late last year when the Australian team was preparing to host New Zealand and Pakistan.
Cricket Australia (CA) chairman Bob Merriman said the proposed memorandum represented an agreement which was fair to all parties.
"It pays Australian elite cricket players well, it encourages young, up-and-coming athletes to choose cricket as their professional sporting career option and it offers Australian cricket improved ability to more aggressively drive participation in the game at a community level," Merriman said in a statement.
"Above all, it is an agreement which allows all Australian cricket stakeholders to continue to work together to ensure cricket retains its position as Australias favourite sport".
The agreement is a major victory for the players' union, which retained its right to have its members earn a share of revenue as opposed to bowing to CA's initial plan to have players allocated fixed contracts.
"I think you'll find we're quite happy with where we're at, the two parties were poles apart at the start and they've come to an agreement in quite a short time from where they were, so it's a good result," an ACA spokeswoman said Sunday.
CA said the next step was to document the proposed agreement.
The head body said once it was finalised, a joint CA/ACA communication program will ensure international and state players, national and state administrators, media and other stakeholders understand the detail of how the new agreement will operate from July 1 this year.
CA directors also discussed at a meeting issues relating to next southern summers Australian cricket program, which will feature tours by South Africa and the West Indies.
It expected touring details to be finalised shortly and announced within the next month.
The meeting also endorsed targets for a new four-year Australian cricket strategy, developed in close consultation with state cricket associations and others during the last nine months, designed to ensure cricket continues to be Australia's favourite sport.
The Board endorsed David Boons reappointment as a selector for a further two years. Current selectors Trevor Hohns and Andrew Hilditch were appointed for two-year terms last year.
CA directors congratulated retiring national selector Allan Border on his significant contribution to Australian cricket as a selector.
The process for Border's replacement as a selector will involve liaising with state cricket associations plus CA approaches to prospective candidates, followed by an interview process and a recommended appointment for CA board consideration at its next meeting in June, CA said.