Apple, the world's most valuable corporation, says it has agreed to work with partner Foxconn to substantially improve wages and working conditions at the factories across China. The decision was made following the inspection from the independent Fair Labor Association, at the prompting of Apple.

Apple Chief Executive Officer Tim Cook (2nd L) talks to employees as he visits the iPhone production line at the newly built Foxconn Zhengzhou Technology Park, Henan province in this March 28, 2012.

Workers manning Foxconn's massive assembly lines will have their pay increased. Their weekly working time will also be reduced from 60 hours to 49 hours, the legal Chinese maximum.

The move comes in response to a month-long investigation at three Foxconn plants, which are accused of extreme working hours and unpaid overtime.

Auret Fan Heerden, president of US Fair Labor Association, said, "We're asking factories to make significant investments to produce a more ethical product. We've all got to be ready to share that cost."

To compensate for the reduced hours, Foxconn will hire tens of thousands of additional workers. It will also build more housing and canteens to accommodate that influx. The FLA audit had found that during peak production times, workers in the three factories put in more than 60 hours per week on average.

At least a dozen young workers at the company committed suicide over the past two years, because of bad working conditions. Meanwhile, a Hong Kong based labour rights group on Friday criticized Apple's use of FLA, calling on Apple's main electronics supplier to consult with workers, instead of making top-down decisions.

Apple CEO Tim Cook, who hoped the company will usher in a more open, transparent era after he took the job, has shown a willingness to tackle the global criticism head-on.

Apple has started tracking the working hours of half a million workers in its supply chain, and said that the working time was 60 hours or less in February, even though the company was ramping up production of the new iPad.

Foxconn's moves are likely to have an impact across the global technology industry. The company also assembles parts for Microsoft, Hewlett-Packard, and other pillars of U.S. Technology.

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