Deputy Interior Minister Carlos Najar will present possible solution to the workers' demands by next week, the government said in a statement.
Sugar workers have been protesting the last two weeks to demand employers pay for medical care for those who have chronic kidney disease that they say is caused by working in cane fields. They also want compensation paid to the families of workers who have died from kidney problems.
Police sent in to remove about 300 farmers who had taken over the entrances to the San Antonio sugar mill fatally shot one farmer and wounded another Saturday.
Authorities said the officers involved in the shooting have been detained and are under investigation. Officials said police fired their weapons after being attacked by protesters armed with stones and homemade mortars.
Nicaragua's highest rates of chronic kidney disease show up around the Ingenio San Antonio, a plant in the town of Chichigalpa owned by the Pellas Group conglomerate, whose sugar mill processes nearly half the nation's sugar.
Paulo Najera, a sugar workers leader, said the protesting employees wanted to take to the streets again to demonstrate over the death of their colleague but most agreed to wait for the government to try to find a solution.
"We are tired of being deceived," Najera said. "This time we want real solutions because there is indignation. There are people who want to use violence against the police, but we will wait."