The Minister for Enterprise, Micheál Martin, has announced the end of the Groceries Order.
The order, which bans selling goods at below their invoice price, was introduced in 1987 to prevent small shops being driven out of business by large supermarket chains.
The minister also announced that he will shortly strengthen the Competition Act to stop unfair price discrimination and ban 'hello money'.
It follows a meeting of the Cabinet today.
The Groceries Order was highlighted this summer by finance expert Eddie Hobbs on the TV show Rip-Off Republic.
Consumer groups have argued that by banning the sale of goods below the invoice price, the order artificially inflates prices.
Last March, the Consumer Strategy Group recommended that the order should be scrapped, and since then Minister Martin has been receiving and considering submissions on the subject.
The independent grocers' group, RGDATA, has led calls for the order's retention, with the support of a significant number of Fianna Fáil backbenchers.
The National Consumer Agency has welcomed today's decision. In a statement the agency's Chairperson, Ann Fitzgerald, described the move as a triumph for the Irish consumer.
She added that less well-off households, who spend proportionately more on groceries, stood to benefit most.
Separately, the Cabinet was also expected to approve the terms of reference for a new statutory inquiry that is to investigate how the Catholic Archdiocese of Dublin dealt with complaints of child abuse.