* Breakthrough follows change at helm of UniCredit
* 3,000 employees to access early retirement plans
* Further 1,700 staff to leave
* Shares up 1.4 percent, outperform sector
(Adds details, union leader quote, shares)
By Antonella Ciancio
MILAN, Oct 17 (Reuters) - UniCredit has reached a deal with unions over thousands of lay-offs in Italy, ending a protracted struggle over a plan by the country's biggest bank to streamline domestic operations.
Under the deal, which helped its shares gain ground on Monday, 3,000 UniCredit employees will get access to early retirement plans, the FABI banking union said on Monday.
This comes on top of planned lay-offs for 600 staff and a further group of 1,100 employees, who are expected to leave the bank in 2014-15, the statement said.
UniCredit has also agreed to hire more than 2,000 new staff by 2013.
By 1137 GMT UniCredit's shares were up 1.4 percent to 1.88 euros, outperforming the STOXX Europe 600 banking index, which was up 0.55 percent.
UniCredit also agreed to hire more than 2,000 new staff by 2013. The breakthrough comes a few weeks after Federico Ghizzoni was appointed at the helm of the bank, replacing Alessandro Profumo, who quit abruptly last month following a power clash with shareholders.
"Negotiations were difficult," FABI secretary general, Mauro Morelli, said. "We are sure Federico Ghizzoni will not hinder the important results achieved."
Profumo, who turned the bank into a pan-European player through a string of acquisitions, had laid out the cuts as part of a plan to boost efficiency.
UniCredit, which trails Intesa Sanpaolo in the number of Italian retail branches it has, had 161,857 employees at the end of June, about a third of them in Italy.
The bank, which has approved a plan to fold seven Italian regional banks into one main unit, had slashed 6,150 jobs and closed about 400 branches between June 2009 and June 2010.
UniCredit posted a 70 percent drop in second-quarter net profit, reflecting a protracted hangover from Italy's worst recession since World War Two.
(Reporting by Antonella Ciancio and Massimo Gaia; Editing by David Holmes and David Hulmes)