The GlaxoSmithKline owned Stiefel Laboratories in Sligo is to stay open.
Around 120 jobs are to be saved at the skincare manufacturing facility, which was supposed to close next year.
The plant will also receive an investment of €10m and the development is being supported by IDA Ireland.
The company said that the "flexibility, productivity and commitment of GSK staff in Sligo have been important factors" in the decision to keep the plant open.
In 2009, just four months after Stiefel was taken over by pharmaceutical giant GSK, it emerged that the plant would close. The plant employed 250 people at the time.
Staff numbers there have since fallen to 180 and current plans will see that number reduced to 120 as the plant moves from the production of pharmaceutical to skin healthcare products.
GSK said that it had selected the Sligo plant as a dedicated supply site for its Stiefel consumer products and the home of its liquid bottling operation.
The plant will also have a role as a development centre for its consumer products in the future.
Stiefel Laboratories opened in Sligo in 1975.
Pat McLoughlin, site director of the plant in Sligo, acknowledged the significant contribution of the workforce in reaching today's decision to keep the plant open.
He said: "'Today’s announcement is the culmination of many years of hard work by the entire team.
"The workforce has shown tremendous effort, commitment and flexibility through a difficult period, increasing productivity by 40% in the last three years. This has been a key factor in the decision to choose Sligo for future development."
Minister for Jobs Richard Bruton said: "Today GSK is announcing that it has reversed its decision to close the Sligo facility, is investing €10m in the facility, retaining 120 jobs, and will create at least 50 jobs from 2014.
"This very welcome news is a great vote of confidence in the workforce, in Sligo and in Ireland and I commend all involved in securing this decision."
Munich Re to set up new R&D centre in Dublin
Reinsurer Munich Re's Automation Solutions division is setting up a Research and Development facility in Dublin. The division already employs 47 people in Ireland.
The new project, which will see an investment of over €8m, will lead to the creation of 17 new jobs. IDA Ireland has worked closely with the company on the expansion.
The new positions will focus on techniques to more accurately assess underwriting risk across insurance classes.
"Ireland is our global centre for commercial software development. Our positive experience and the success we have enjoyed here made Ireland the natural choice for this pioneering project," commented Ross Mayne, chief executive of Munich Re’s Automation Solutions division.
Minister Bruton said the news from Munich Re is very welcome news for Ireland's financial services sector.
Munich Re is one of the world's largest reinsurers and has 40 million clients in over 30 countries. It has a workforce of over 47,000 people across three business divisions.
Headquartered in Ireland, the company's Automation Solutions division also has offices in Tokyo, Sydney and Chicago. Its list of clients includes Zurich, Liberty, HSBC, Prudential and Aegon.