The Government has announced support for a recapitalisation programme of up to €10 billion for credit institutions.
In a statement issued tonight, it said its objective was to ensure the long-term sustainability of the banking sector in Ireland.
The Government said it would support the programme alongside existing shareholders and private investors, and would underpin its contribution through the availability of credit to individuals and businesses in the real economy.
After a day of meetings, Minister for Finance Brian Lenihan confirmed that money from the National Pensions Reserve Fund will be used in the recapitalisation programme.
State investment will take the form of preference and/or ordinary shares in the institutions receiving funds.
Mr Lenihan said State investment would be assessed on a case-by-case basis and all the institutions were being asked to submit their proposals by early next month.
A spokesperson for AIB said the bank's board would discuss the Government announcement when it meets later this week.
There will be a special Cabinet meeting tomorrow, in addition to the regular meeting on Tuesday.
It is understood ministers will discuss the Government's plan for economic recovery and the latest developments in efforts to recapitalise the banks.
IBEC has welcomed the announcement on recapitalisation.
Director General Turlough O'Sullivan has said the banking sector is vital to the effective functioning of business and the economy generally.