New regulations are to be introduced requiring all dogs to be microchipped.
Minister for Agriculture Simon Coveney said the plan would help protect the welfare of dogs.
Mr Coveney indicated a possible introduction date of 2016. Similar regulations are due to take effect in England that year too.
The announcement has been welcomed by both the ISPCA and the Dogs Trust.
Mr Coveney said his officials are to hold discussions with veterinary practitioners in a bid to make the process as affordable as possible.
Speaking in the Dáil today, he said it should cost less than €10.
The Executive Director of Dogs Trust Mark Beazley has said the charity has long campaigned for compulsory microchipping.
Mr Beazley said microchipping means dogs that stray or go missing can be reunited with their owners.
He added that if a dog is worrying livestock or causes an accident, the owner can then be identified and held to account.
He said when a compulsory scheme is introduced it must be combined with a centralised database.
The database must have a code of practice so that the data can be verified and remains up to date.
It is hoped if a dog dies or changes ownership that is reflected on the database.
Mr Beazley said he understood that at the moment microchipping will not be linked to dog licences.