The Department of the Environment has given Dublin City Council permission to become the first local authority to implement the scheme, which was launched today.
Based on similar schemes in the private sector, home buyers can rent for up to three years before deciding whether to buy.
The council will put 91 rent-to-buy properties on the market in Rialto, Finglas and Glasnevin.
It has already sold-off most of its backlog of affordable housing caused by the slump in the private market.
According to the Council, the main advantage of the rent-to-buy scheme is that home buyers can put 80% of rent they pay over three years towards the purchase price, and then get all the furnishings as part of the deal.
Prices will be around 10% cheaper than market prices and rents will be 20% less.
Affordable housing buyers will face a financial claw back if they sell within a number of years.
A first-time buyer earning under €55,000 a year would qualify for affordable housing.
