An Post is to begin a review of post offices around the country, which is expected to result in up to 500 closures.

The study which is to be completed by the end of the year will identify post offices that are not viable.

These postmasters will then be offered voluntary severance.

There are 1,300 post offices around the country, many of which are losing money, and it is believed that a radical initiative is needed to save the network.

An Post is finalising a deal with the Irish Postmasters' Union to begin the process of shutting down offices.

Together they will undertake a review of the viability of every office in the country.

Closures will be spread around the country leaving every citizen within a specified distance of a post office.

There will be no compulsory closures and it is hoped they can all be achieved on a voluntary basis.

Also on the table is €12 million in payments to postmasters, half will come as a lump sum backdated over the past year and the remainder will fund a pay rise for this year with further increases to follow.