Three months after the city's $7 billion budget took effect, the City Council on Friday approved labor deals with three-fourths of its work force that cut Los Angeles' $405 million deficit in half without layoffs or furloughs.

The agreements with the Los Angeles Police Protective League and the Coalition of City Unions are expected to save more than $78 million this year and as much as $1.7 billion over the next five years.

"These are key to dealing with our historic financial problems," Mayor Antonio Villaraigosa said. "At the beginning of the year, I laid out our problems and said we would need shared sacrifice from the city workers. They have stepped up to the plate."

Villaraigosa said the biggest savings will come in next year's budget as the early retirement of 2,400 workers shaves millions off the city payroll.

"This goes a long way in addressing the deficit," City Administrative Officer Miguel Santana said. "The savings we are generating will give us a good head start on next year."

Under the agreements, early retirement incentives will be offered to members of the Coalition of City Unions, an umbrella group that includes six unions with more than 22,000 workers.

In return for the incentives, the workers agreed to forgo two years of automatic cost-of-living increases.

For the 10,000 officers covered by the Los Angeles Police Protective League, the agreement calls for a two-year reduction in overtime costs totaling $72 million and no salary increase for two years.

The coalition issued a statement saying it was "a difficult decision for many members, but after meeting and debating for weeks, a majority cast their votes in solidarity with their co-workers. Now longtime workers can retire with dignity, protecting those beginning their careers with the city who were vulnerable to layoffs."

One union leader, who asked not to be identified, called it "municipal patriotism."

The Protective League said the contract helps the city and officers in resolving the immediate issues.

"This gives us the opportunity to proceed for the next 18 months knowing our working conditions and compensation are secure," League President Paul Weber said.

City officials praised the workers for agreeing to the reductions.

"I would urge people, when they see a city worker fixing a pothole, repairing a sewer, handing out books at libraries, that they thank them," said Council President Eric Garcetti. "They are sacrificing to make sure the city is fiscally sound and that we are able to continue providing these services."

The city had threatened layoffs if workers did not agree to concessions.

The coalition said the retirement program will bring savings to the city and give it a more orderly way to reduce its work force.

A Web site, www.erip.lacity.org., has been established to help the workers determine what they will get under the program and to help process their applications.

Officials estimate upwards of 7,600 workers are eligible for early retirement. Analysts have estimated that the average retirement payment will be $33,000 a year.

Santana said 400 of the retirement slots have been taken and others interested in applying should do so immediately.

Councilman Bernard Parks, who chairs the council's Budget Committee, cautioned that the full impact will not be felt this year and that the budget will need constant monitoring to make sure it is hitting its goals.

Not affected by the agreement is the Engineers and Architects Association, which decided to continue to receive the cost of living increases. They have been subject to furloughs.

Also not affected is the United Firefighters of Los Angeles City. Negotations with that union are at an impasse and awaiting a decision by the Employee Relations Board.