To put an end to almost two years of pay negotiations, and finalise an enterprise bargaining agreement at the jail, a clause related to the proposed needle exchange was scrapped unlocking back pay of up to $7000 for each of the 180 staff.

But Justice Minister Shane Rattenbury denied the agreement reached with the Community and Public Sector Union spells the end for the proposal, instead a new model for the needle exchange, to be developed by the government and union over the next 12 months, will go to a staff ballot.

The majority will have to support the exchange to get the Australian-first scheme off the ground which Mr Rattenbury was optimistic would occur after the "collaborative approach" addressed staff concerns.

"I don't think it is the case that all staff reject this… there are staff that are open to the idea, but there are some with real reservations and some that flat out disagree," he said.

"We could never force it on the staff… if we had, it never would have worked."

CPSU national president Alistair Waters said the union would approach consultation on the "difficult issue" with an "open mind", but admitted most staff remained opposed to the scheme.

"The overwhelming view of corrections' officers is that a needle exchange program is not in the interests of the health of the prisoners or of the good order of the jail," he said.

"It's not just our members' concerns that need to be addressed… there were concerns expressed by the prisoner advocate who interviewed well over 100 prisoners on their views on a needle exchange in the jail."

The Public Health Association of Australia CEO Michael Moore welcomed the agreement, but was concerned prison staff alone would have the power to veto the implementation of a workable program without input from other stakeholders.

"The implementation of key public health measures should be based on evidence, not popular opinion," he said.

"The evidence from such programs run overseas indicates that they can operate safely and effectively in prison contexts."

Hepatitis ACT executive officer John Didlick agreed and said it was "surprising" the staff as public servants would be allowed to vote on the implementation of the government's policy.

He said "doubts and myths" remained among staff as the whole workforce was yet to receive "comprehensive, mandatory and regular training and education" about the government's policy to manage blood-borne viruses in the jail.

Hepatitis Australia CEO Helen Tyrrell said allowing public servants and unions to veto the government decision set a "dangerous precedent".

"What we need is strong political leadership, not a capitulation on good health policy," she said.

"If it wasn't such a serious issue I'd suspect an April Fool's gag was in play."

The needle exchange was part of an agreement struck by Labor and the Greens on forming a minority government after the 2012 ACT election, but Mr Rattenbury said the scheme's rollout was not about election timetables and even if an agreement with staff could not be reached he would "never give up" on the proposal.

"I am concerned that at the moment prisoners are sharing needles and that's why the government remains committed to delivering a needle and syringe program," he said.

Penington Institute CEO John Ryan, the convenor of the Australian Harm Minimisation in Prisons Committee, said the government was "weakening democracy" by backing down on the exchange and gifting a veto to the union which "almost certainly" will never agree to any model.

He said needles were not used as weapons against prison staff where in-prison needle exchanges operated overseas.

Mr Rattenbury was unable to say what the current rate of blood-borne disease was in the jail, but said correction systems across the country were key places for the spread of hepatitis and other viruses as detainees were unable to access clean needles.

He said the government remain committed to its "three-prong approach" to tackling drugs in jail, doing its best to stop contraband entering the system and working with prisoners to decrease demand with drug treatment programs.

Although Correction Services and the union will co-chair the committee, Mr Rattenbury said ACT Health and other stakeholders would also be involved.