Public school teachers voted Wednesday to approve a $330 million, four-year contract that will tie their pay raises in part to student performance.

Ninety-five percent of teachers voting voted to ratify the deal, according to the 13,500-member Hawaii State Teachers Association. About 70 percent of HSTA members voted.

The agreement, which includes annual pay increases and reduced medical premiums for teachers, ends a two-year labor dispute with the state.

HSTA President Wil Okabe said at a news conference Wednesday night, "Many teachers really took it to heart, they wanted a contract, they wanted to send a very strong message to the state of Hawaii that they wanted a fair and equitable contract.

"I believe by this vote, it clearly shows that teachers are ready to go on to the next level and (we are) headed to educational transformation as we look at trying to improve teaching and also to improve learning for our students."

Regarding the contract’s price tag, Okabe said, "I do not believe for a second that the Legislature would not fund this agreement."

Gov. Neil Abercrombie said in a statement, "The teachers’ ratification of this contract is a positive milestone for public education in Hawaii. We can now move forward as partners in transforming education for the benefit of our students and the entire state. On behalf of my administration, the Department of Education and the Board of Education, we extend our sincere appreciation to Hawaii’s teachers for their dedication, sacrifices and professionalism in the classroom."

The deal was expected to be favorable among teachers who have been working under a "last, best and final" contract unilaterally imposed by the state in July 2011, which included wage reductions and increases in health care costs. Some teachers said they voted "yes" despite reservations so that teachers could get pay increases and relief from the imposed contract.

Under the contract, a 5 percent pay cut made in 2009 will be restored and teachers will see annual salary boosts of at least 3 percent through a combination of across-the-board increases and pay grade step-ups in alternating years.

Raises for existing teachers will be tied to performance evaluations beginning July 1, 2015.The agreement also includes a so-called "reopener clause" allowing the HSTA to negotiate in 2014 for increased compensation once a salary study called for in the contract is completed.

"The financial relief is a big deal because we’ll go back to the 2009 pay scale. That’s great; it’s a good start," said Ashley Olson, who teaches French and Spanish at Lahainaluna High and voted for the contract.

King Kamehameha III Elementary special education teacher Justin Hughey said, "I ended up voting for this because teachers are in desperate need of economic assistance since our paychecks in 2008 were more than today’s," but added, "I still need to work a second job with this contract."

A new teacher evaluation system being piloted in 81 schools this year is scheduled to be implemented statewide next school year, but no personnel consequences would immediately kick in for current teachers under the contract.

The evaluations include several measures — such as student surveys, test scores and classroom observations — with half of the evaluation based on teacher performance and half on student growth.

As part of the new contract, the DOE and the HSTA will form a joint committee to review the design, validity and reliability of the performance evaluation system and recommend changes to improve its design and implementation.

"The last contract offer had no parameters on the teacher evaluation system. The outlook was, ‘Oh, just trust us,’" Olson said. "This time around there’s a decent framework in place. That for me was absolutely huge."

Corey Rosenlee, a Campbell High social studies teacher and an organizer of the "Work to the Rules" movement that several teachers credit for helping end the labor dispute, said he voted for the contract despite serious concerns.

"I voted yes, but the big message that needs to get out is: How do we fix the long-term systemic problems? We need to look at what we need to do to recruit and retain teachers in Hawaii, and I don’t think this contract fixes that in the long term," he said.

Hawaii public school teachers, including nonclassroom and 12-month teachers, earn an average annual salary of $53,120, according to the state Department of Education.

Rosenlee added that he’s "leery" of the new evaluation system. "The focus shouldn’t be on firing the bad ones. It should be on hiring good ones," he said. "I’m not against evaluations. The devil will be in the details on that one."

As part of the agreement, the teachers union has pledged to withdraw its complaint against the state over the "last, best and final offer" — a move seen by some teachers as a discouraging concession.

Over nine months in 2011-12, the HSTA’s legal team argued and pushed its case before the Hawaii Labor Relations Board, claiming the state violated members’ collective bargaining rights when it unilaterally imposed a contract that saddled teachers with pay cuts and a larger share of health insurance premiums. Hearings in the prohibited-practice case ended last May, but no ruling had been made.

The union turned to the Hawaii Supreme Court to protest the board’s delay in making a ruling, but that effort failed. The HSTA again petitioned the Supreme Court in January to compel the board to issue a decision, but that bid was denied. Similar lawsuits were unsuccessful in Circuit Court.

The ratified contract follows failed attempts over the past two years to reach a deal.

Last May, teachers voted to approve the state’s offer of a six-year contract after initially rejecting the deal earlier in 2012. At that point, Abercrombie said the offer no longer had legal standing. In January, the state rejected the union’s proposal of 4 percent across-the-board increases for teachers in each year of a four-year offer. In December, the state had offered teachers 2 percent annual increases over two years.

The ratified agreement heads to the Legislature for a decision on whether to fund the increases.