The policy would have forced drivers to meet their bus midway through a route to start their shift.
More than 4,000 members of Unite employed by Metroline had been due to walk out for 48 hours on May 25-26, followed by a 72-hour strike from June 7.
But it said on Monday it had called off the action after Metroline guaranteed such measures would not be considered on current or new routes until December 31 2022.
Unite estimated that remote sign-on would result in a 7 per cent pay cut for drivers on average, as they are only paid for driving time.
It also raised safety concerns, as there would be no checks on whether a driver was fit to drive at the start of each shift.
Unite said drivers could be forced to work longer to make up for the shortfall in wages, as well as being denied access to toilets, canteens and rest areas.
Union representatives said it could increase fatigue, cause ill-health and contribute to a higher rate of road accidents involving buses.
Metroline agreed remote sign-on would not be introduced in future before consulting with the union.
Around 95 per cent of Unite's members had voted for industrial action, and 80% voted to accept the new proposals.
Unite regional officer Mary Summers said: "This is an excellent result for our members at Metroline who were rightly fearful of how remote sign-on would affect their pay, health and wellbeing.
"The level of anger expressed by Metroline workers demonstrates how deeply unpopular and potentially dangerous remote sign-on is among London bus drivers."
Unite said it is in discussions with Transport for London about remote sign-on, but if the process is recommended it will oppose its introduction, potentially leading to London-wide strikes.