The Minister for Justice, Michael McDowell, is to proceed with plans to close two prisons and privatise prison escort services following what the Justice Department says is the overwhelming rejection of a pay deal.
The Prison Officers' Association had been balloting on the deal for the last two months.
The pay package would have seen a saving of some €25m on overtime in return for pay increases and a once-off compensation deal for prison officers.
A spokeswoman for Mr McDowell said that the minister would now be proceeding with legislation to privatise the prison escort system.
The minister will officially close the Curragh and Spike Island prisons, which have been out of service for some time. Transfers that applied to officers there are to be made permanent.
Open prisons at Loughan House in Co Cavan and Shelton Abbey in Co Wicklow will also be converted into post release centres to be run by another agency outside the prison service.
Mr McDowell is to call in the country's prison governors over the weekend.
It is understood he will be telling them that from now on their institutions would have to operate on a monthly budget without any overruns and that staff costs would have to be controlled accordingly.
