The European Commission has approved the Government's €3.5bn capital injection into Bank of Ireland.

The Commission said that the measure had enough safeguards not to distort competition.

‘In addition to difficulties caused by the global financial crisis, recent developments with regard to the sharp decrease of Bank of Ireland's shares' value increased the need to reassure the financial markets of the bank's stability,’ the Commission said in a statement today.

The Government had notified the EU antitrust regulator of their plan on 11 March.

The package has restrictions on the payment of dividends and curbs on executives' pay, among other conditions.

The bank will need to submit a restructuring plan within six months to the Commission for approval.

Bank of Ireland shareholders will vote tomorrow on whether to accept the state bailout.