The Government is to re-open an embassy in the Vatican more than two years after it was closed for cost reasons.
It will be a scaled-back "one-person" mission focusing on development aid and it will be located in new premises in the Vatican.
There was controversy in late 2011 when the Government decided to close the mission on cost grounds.
The Italian embassy was then transferred to the Villa Spada, which had housed the Vatican embassy.
The Department of Foreign Affairs said the return of the embassy in the Vatican will "enable Ireland to engage directly with the leadership of Pope Francis on the issues of poverty eradication, hunger and human rights".
Apostolic Nuncio to Ireland Archbishop Charles Brown said: "I am very pleased by the announcement of the Irish Government regarding the reopening of a residential Embassy of Ireland to the Holy See, and the appointment of a resident Ambassador. "
He said: "It is an excellent decision for the people of Ireland and will be beneficial to Ireland in making its distinctive and important contribution to international relations."
Archbishop of Dublin Diarmuid Martin welcomed the announcement and said the Vatican is an important place of "interchange on questions of global development".
He said that a resident Irish ambassador will enhance relations between the Vatican and Ireland.
Chairman of the Oireachtas Joint Committee on Foreign Affairs and Trade Pat Breen said the embassy will provide a vital link between Ireland and the Vatican and the move was a "sensible resolution" to the issue.