General Motors

(GM) - Get Report

has agreed to contribute nearly $30 billion to finance a union-controlled health care trust fund, according to a summary of the arrangement released by the United Auto Workers.

The tentative agreement on a historic new labor contract between the automaker and the UAW received unanimous approval from the union's local leaders across the nation on Friday.

That sets up a vote on the agreement for the union's 74,000 members, expected to be held next week. While some members have expressed skepticism about the pact, which includes unprecedented concessions in labor costs for GM, it will likely be accepted.

The deal includes the formation of a UAW-controlled fund to pay health care costs for retirees, which would free GM from roughly $50 billion in obligations in return for $30 billion in cash payments to finance the fund. It also allows GM to pay lower wages to new workers and offer financial incentives to induce older workers to retire.

GM would pay an additional $5.4 billion to fund retiree health care while the UAW is setting up the health care trust. The union would assume control over the fund in 2010.

The contract includes a guarantee from GM that cars and trucks will be built at 16 U.S. plants. Hourly workers will get economic gains totaling $13,056 over the life of the four-year contract, along with a moratorium on outsourcing jobs and a shift to full-time wage rates for 3,000 temporary workers.

The contract would allow GM to make progress toward achieving parity on labor costs with foreign-based competitors that have been feasting on its market share.

For the UAW, the health care and pension fund for its members will be sheltered from the risk of bankruptcy at GM, and their employer will be in better financial shape to promote its long-term survival.

That said, workers' benefits will be subject to risks in the financial markets, since the fund will have to sustain a healthy level of returns in order to afford its obligations.

If UAW members vote to approve the contract, the union is expected to move forward with similar negotiations with the rest of Detroit's Big Three,

Ford

(F) - Get Report

and

Chrysler

. An agreement with GM would clear the way to achieve the same arrangement for the others.

Shares of GM rose 70 cents, or 1.9%, to $37.16.