The Government is to proceed with "legislation with regulations" following the Expert Group report on abortion.
Appropriate amendments to the criminal law have also been agreed.
Ministers based their decision on the recommendations of the Expert Group on the issue, which were published last month.
The group came up with a range of options, but clearly favoured introducing regulations backed up by legislation.
The group said that solution would be legally robust, but also flexible enough to deal with any scientific or medical developments in the area.
Next year the Oireachtas Health Committee will hold a series of hearings ahead of the framing of legislation, which could come before the Dáil as early as Easter. All eyes will be on the Bill to see how it deals with the suicide issue.
However, Minister for Health James Reilly said the Government is committed to ensuring that the safety of pregnant women in Ireland is maintained and strengthened.
He said: "We must fulfill our duty of care towards them. For that purpose, we will clarify in legislation and regulation what is available by way of treatment to a woman when a pregnancy gives rise to a threat to a woman's life.
"We will also clarify what is legal for the professionals who must provide that care while at all times taking full account of the equal right to life of the unborn child.
"Today the Government has decided the form of action to be taken.
"We will not preempt the debate that must follow by speculating on details to be decided later in the process."
Some TDs fear allowing abortion when the woman presents with suicidal intentions could allow a regime that would prove too liberal.
New legislation before summer recess
Later, Mr Reilly said he is hopeful new legislation on abortion will be passed before the summer recess of the Dail in 2013.
He said it was clear following the expert group report that the Government needed to regulate and legislate for the European Court of Human Rights ruling and the Supreme Court judgement on the X case.
He said the legislation would cover the area of suicide as it was "very clear" the Supreme Court had covered this area in its judgment.
The minister said that regulation and legislation involving suicide was "important to make sure the issue of suicide is not abused as it has been perceived to be in other jurisdictions".
He said Ireland had a "duty of care" to women in Ireland so they had "certainty" about health services available.
He said he would "try to create as much consensus about this as possible", adding there was a need to match the "need for urgency" on the issue, with getting it right.
He hoped legislation may be passed by the summer recess, "if not a lot sooner", and that there was "consensus" around the Cabinet table on the decision.
Suicide issue
Earlier, Dr Berry Kiely of the Pro Life Campaign said if the threat of suicide is included in any legislation to give legal clarity on abortion it will radically change medical practice in Ireland and the Irish legal system.
Speaking on RTÉ's Morning Ireland, Dr Kiely said it would introduce, for the first time, the direct and intentional killing of the unborn into Irish law.
She said there was a difference between medical treatment, which may result in the death of a foetus, and abortion, which is intended to end the life of the unborn.
"This is where the whole issue of suicide comes into it, because a woman who says she's suicidal because of being pregnant with this baby, what she's saying is she doesn't want a living baby at the end of this procedure," Dr Kiely said.
"You're actually, in that situation, proposing to directly and intentionally ensure the death of her baby. That's a very radical change for medical practice in Ireland, for our legal system, for whatever."
However, Jacqueline Healy, from the National Women's Council of Ireland, said that in the X Case, the Supreme Court specifically dealt with the threat of suicide.
Speaking on the same programme, Ms Healy said that the right to abortion, where the risk of suicide poses a threat to the life of the mother, is a constitutional right that has been delayed for 20 years.
"If the Government does introduce legislation, or indicates that they're going to introduce legislation, we would welcome that. It would be a historic day for women's health rights in Ireland," Ms Healy said.
"The situation is that we have a judgment, the ABC judgement in the European Court of Human Rights which we do have to implement.
"We had the UN Special Rapporteur on the Right to Health here yesterday and he said to give legal clarity to that judgment, legislation needs to be introduced and we need to repeal the Offences Against the Persons' Act to decriminalise abortion."
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