The new pay and grading structure negotiated between the council and trade unions aims to address pay inequalities suffered by many women workers who have been paid less than male colleagues doing similar jobs.
Councils across the country have been involved in equal pay negotiations following a court ruling that they were illegally paying women less than their male counterparts.
The deal proposed for 23,000 Leeds City Council staff would mean no change or a small pay rise for over 90 per cent of the workers but about 2,000 people face cuts.
Refuse collection crews are particularly hard hit, with some of them complaining their wages would fall by up to £6,000 a year.
While members of Unison and the Transport and General Workers unions have accepted the new structure, those in the GMB voted to reject the deal.
GMB shop stewards will meet early this month to decide their next steps in the dispute.
Neil Derrick, GMB senior organiser, said, "Members registered their concern that under Leeds City Council's proposals low paid women workers would not make the gains that they should do.
"They don't find the pay proposals fair and transparent and they strongly object to GMB members losing up to £6,000 per year."
Council chiefs estimate that the planned new structure would add about £8m a year to its pay bill.
They say the GMB's rejection means it will not now be possible to implement the new structure through collective agreement with the trade unions.
Paul Rogerson, the council's chief executive, said: "Over the past few years we have worked hard to agree a revised pay and grading scheme for thousands of council staff, and it is very disappointing that plans to implement the revised scheme must now be put on ice.
"However, notwithstanding the council's current, very difficult financial position, we are determined to find a way of implementing the revised scheme and putting the council's male and female staff on to an equal footing as soon as we can in 2008."