More than 11,500 City Hall workers and their dependants will now be able to access their medical insurance cover, which had been suspended.
Last Friday, the county government struck a deal with AAR Insurance Kenya Limited to restore the comprehensive medical scheme for its staff.
The employees had threatened to down their tools, accusing City Hall of failing to pay their insurer, AAR Insurance, leading to an impasse between the two parties.
The workers' union said 20 of its members had died between March 16 and April 8 due to failure to access prompt medical attention.
But last Friday, the Kenya County Government Workers Union, Nairobi branch Secretary Festus Ngari announced the cover's restoration.
"Kindly note that the county medical insurance cover has officially been reinstated by AAR Insurance Kenya Limited effective this afternoon. You and your dependants can now access uninterrupted healthcare services," Mr Ngari said.
AAR received Sh270 million from City Hall on Thursday, which pledged to clear a Sh260 million balance by April 23.