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UPDATE 1-Volkswagen lifts German workers' wages by 4.3 pct - union

* Wage deal struck for 120,000 workers in 4th round of talks

* Deal is in line with sector agreement in early Feb

* Workers can choose further rise in 2019 or more time off (Adds details of agreement)

HAMBURG, Feb 21 (Reuters) - Carmaker Volkswagen agreed to raise the wages of more than 120,000 workers in Germany by 4.3 percent from May, labour union IG Metall said on Wednesday after a fourth round of talks yielded a deal overnight.

The deal mirrors an agreement IG Metall won for around 3.9 million industrial employees in Germany this month after threatening widespread strikes.

As part of the agreement at Europe's largest automaker unveiled on Wednesday, workers at facilities in western Germany will also receive an additional payment equivalent to 27.5 percent of their monthly wage once a year from next year.

Alternately, they can choose to take six additional days off instead of the payment, IG Metall said.

The union had demanded a 6 percent wage increase and pushed for improvements in VW's corporate pension scheme and more hiring of apprentices to help cope with an industry shift to electric vehicles and self-driving technology.

But VW, facing billions of euros in costs and fines over its diesel emissions-test cheating scandal and huge investments for its subsequent transformation plan, had dismissed the demands.

It had offered instead to raise wages by 3.5 percent and a subsequent 2 percent as part of a wage contract proposal covering 30 months. (Reporting by Jan Schwartz; Writing by Maria Sheahan; Editing by Keith Weir)