The Iraqi government announced on Monday that it was going to pay the salaries of employees in Kurdistan for the first time since 2014. Civil servants and peshmerga forces will benefit from the federal government’s decision. "The finance ministry of the central authorities has transferred the salaries of all the civil servants in Kurdistan, including the peshmerga," the office of Prime Minister Haidar al-Abadi said on Twitter. The announcement was the latest sign of an easing of tensions between the two sides and comes a week after Baghdad lifted an air blockade of the autonomous Kurdish region in northern Iraq. Federal authorities had imposed the blockade and stopped paying the salaries to Kurdistan after it organized in September an independence referendum rejected as illegal by the central government. Iraqi government spokesman Saad al-Hadithi said in all "around 317.5 billion Iraqi dinars" (around $262 million) had been transferred on Monday to cover salaries for one month. A similar amount would be sent to Kurdistan every month as long as authorities there respected conditions laid out by Baghdad, he added. In a statement, the KRG said its finance ministry had received the transfer and would distribute it. Asked about future payments to the KRG to cover salaries, Hadithi said the federal government would agree to pay a portion while the rest should be covered by the KRG from its oil sales. Earlier this month, Iraqs parliament adopted an $88.5 billion budget for 2018, with Kurdish lawmakers boycotting the vote to protest against a cut in the amount allocated to their autonomous region. Kurdistans part of the national budget was reduced from 17 percent to 12.6 percent. Iraqi Kurds overwhelmingly backed independence in the non-binding referendum held on September 25. In response, Baghdad demanded the vote be annulled and imposed air and trade restrictions on the Kurdish region. Late last year, federal forces recaptured the oil fields, severing a key financial lifeline for the Kurds. Issues of the KRG’s independent oil sales and share of the budget remain unresolved. Baghdad has sent teams of auditors to Kurdistan in recent months to assess the number of employees on the region’s payroll. A statement from the Prime Minister’s office announcing the agreement on Monday, specified that the audit was ongoing.