Sydney Trains and the Rail, Tram and Bus Union (RTBU) representatives have been locked in another round of negotiations about pay and conditions since 11.00am.
Around 1 million Sydneysiders are expected to be impacted by a total strike for 24 hours from midnight Monday, 29 January.
Fair Work Commission's senior deputy president Jonathan Hamberger ruled that the industrial action "threatens to endanger the welfare of part of the population".
The FWC has ordered that the strike and overtime work ban be suspended for six weeks from 6pm today. We are a law-abiding union.
"Our customers are not cannon fodder for industrial disputation", he said.
NSW Premier Gladys Berejiklian labelled the decision a "huge relief".
Rail Disruptions Look Set to Continue in Sydney
The Rail, Tram and Bus Union has been negotiating with Sydney trains and the New South Wales Government for almost a fortnight now.
"Despite calling on hundreds of additional buses we are still unable to replace the full capacity of cancelled train services", Transport Coordinator General Marg Prendergast said in a statement.
It made an urgent application on Wednesday night to suspend the strike and overtime, which began on Thursday, cutting services nearly by half.
Only 5.93 per cent - about 360 workers - responded in favour of suspending industrial action.
The rejected pay deal included an annual pay increase of 2.75 per cent and $1000 bonus for employees, as well as free travel pass extensions, but the union is pushing for a six per cent pay rise over the next four years.
This comes after several days of meetings between the NSW Government and the rail union at the commission.