The automaker is the last of the three Detroit automakers to make a deal with the union.
Chrysler said in a statement that the deal includes $4.5 billion in new investment in retooling plants to produce new models and components by 2015. It did not offer other specifics of the deal.
The agreement covers 26,000 U.S. workers and is subject to ratification by Chrysler's workers.
"This agreement is the latest in a remarkable turnaround for Chrysler," UAW Vice President General Holiefield said in a statement. This is the first contract agreement reached since Chrysler's government bailout and bankruptcy two years ago, and the first since Chrysler has been managed by Italian automaker Fiat SpA.
The union scheduled an 11:30 a.m. EDT (1530 GMT) news conference at which it's expected to reveal more.
But the agreement is expected to be similar to deals reached earlier with General Motors Co. and Ford Motor Co. GM workers have already ratified their contract, but Ford workers are still voting.
Workers at those companies gave up pay raises for most union members in exchange for profit-sharing payments.
