Last week, members of Unison held a rally at Stormont, warning of potential industrial action over pay.
Nesbitt is due to meet health trade unions to discuss options and the best way of moving forward.
In a statement on Tuesday, Nesbitt said: “Budgetary decisions by the Executive, including the allocations announced today, mean there is insufficient funding to maintain pay parity for health service workers.
“That is an extremely regrettable position with potentially serious consequences.
“I could not in all conscience support it today. I could not look health service workers in the eye and say I had put my name to pay funding that will be lower than England and Wales.”
The Ulster Unionist leader added: “Let’s be clear. The Executive has knowingly, with its eyes wide open, decided to break pay parity for health service workers.”
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