The Rail, Tram and Bus Union met with Transport Minister David Elliott on Tuesday morning but the talks failed to resolve the workplace fight that has limited train services on Tuesday after a system-wide shutdown on Monday.
In a dramatic turnaround hours later, Mr Elliott fronted the media saying senior lawyers had advised the government to withdraw from Fair Work Commission proceedings against the union as part of normalising train services.
"Senior counsel have given that recommendation which the government accepts in the interest of not only transparency but also goodwill," he told reporters.
"As a result of that I have agreed with the union today that we will start to commence rewriting the enterprise agreement that expired in May last year."
He described the FWC withdrawal as an "act of good faith" from the government hoped in return the union would return to a COVID-19 rail timetable to be used until Sunday.
"Ideally that would return tomorrow, but of course I do understand that the union needs to go back to its members," Mr Elliott said.
The government will meet again with the union on Thursday for discussions on the city's train fleet, wages and safety issues.
Transport for NSW shut down the entire rail network down on Monday, citing unspecified safety concerns.
The move blindsided around half a million commuters, with many left stranded across Sydney, Newcastle, the Central Coast, Blue Mountains and Illawarra.
The union insisted limited industrial action planned for Monday would not have affected safety and workers were ready to run the trains.
Since 2021 the government and union have been at loggerheads on industrial issues surrounding the enterprise agreement such as safety guarantees, hygiene and privatisation concerns.
Premier Dominic Perrottet has called the stoppage part of a "concerted attack" on the government by the union and Labor.
Trains are back running at 25 per cent capacity on Tuesday with most trains timed every 30 minutes, while services on Sydney's inner-city rail network are reduced to every 15 minutes with buses supplementing some services.
Sydney Trains says commuters can expect a limited service for days before frequency increases later in the week, and train passengers are being urged to find alternative transport.
