In the statement, the Labour and Vocational Training Ministry said workers at garment and footwear sectors will receive a minimum monthly wage of $100 from Feb 1.
The $20 pay hike comes after thousands of workers joined protests and rallies with the main opposition Cambodia National Rescue Party demanding that the minimum wage be doubled to $160 per month.
Despite Tuesday's announcement, some garment workers' unions say they remain unsatisfied and will continue their protests.
The garment sector is one of the country's major sources of income. There are currently 925 garment and footwear factories operating in Cambodia with some 700,000 workers.