Air Peace will recall some of the pilots it sacked after the intervention of the aviation minister, Hadi Sirika, an official statement noted.
The airline laid off some of its pilots due to the economic impact of the COVID-19 pandemic.
Nigerian airports were shut for over three months for both domestic and international flights, except for essential flights.
That affected the indigenous airline which then laid off some of its staff and pilots.
The sack has put the airline in confrontation with the National Association of Airline Pilots and Engineers (NAAPE).
On Tuesday, Mr Sirika called a meeting between the airline's management and the leadership of NAAPE in his office in Abuja.
According to a statement signed by the ministry's spokesperson, James Odaudu, a verbal agreement was reached after the dialogue.
Allen Onyema, the chairman of Air Peace, reportedly agreed to the minister's appeal for the recall of the maximum number of pilots that the airline can accommodate without going under.
In their presentation, NAAPE, led by its chairman, Galadima Abednego, reportedly said that some missteps could have been made in the course of the standoff between the airline and the union. It appealed to the minister to intervene in order to resolve the impasse.
He said as a union, it was a painful thing to see a large number of their members thrown into the labour market and appealed to employers of labour to see the union as a partner and not an adversary.
On his part, Mr Onyema reportedly expressed his sadness and disappointment over what he called the ingratitude of some of the airline's pilots after everything was done to make them comfortable on their jobs.
He said Air Peace had trained over 80 pilots and an equal number of aircraft engineers, giving its staff the best remuneration package within the sector only for them to disappoint at a time their understanding was needed.
He, however, commended Mr Sirika for providing the required leadership to the industry and promised his full cooperation in ensuring the growth of the aviation sector in Nigeria.
Mr Sirika in his remarks called for the understanding of everyone, especially the labour unions, on the prevailing situation in the aviation industry, saying it was not the time for unnecessary upheavals.
He commended Mr Onyema for his enormous contributions in developing the industry and appealed to him to recall the maximum number of the sacked pilots that the airline can comfortably accommodate in the prevailing circumstances.
He called on all stakeholders in the aviation industry to put all hands on deck in ensuring rapid recovery from the effects of the COVID-19 pandemic.
Nigerian airports were last month opened for domestic flights while international flights are still suspended.