UC spokesman Steve Montiel said $140 million will be handed out to non-union faculty and staff members who earn less than $200,000 a year.
The hope is to retain quality employees who've endured years of furloughs and other painful cuts.
The money will come from tuition increases that already have been approved, general fund money and other university sources.
Staff employees who began working for the university system after Jan. 1, 2011, or who have been given raises as a result of a promotion would not be eligible for merit raises.
Most employees represented by unions have received pay raises because of previously negotiated labor contracts, UC President Mark Yudof noted in a letter to chancellors Wednesday.
The raises will begin this November.
The Associated Press contributed to this report.