The Government has approved the establishment of a new education and training authority, which will be called SOLAS.
The new body will replace FÁS, which is to be disbanded. SOLAS stands for Seirbhísí Oideachais Leanunaigh Agus Scileanna.
Functions previously carried out by FÁS will now be taken over on a 50/50 basis by both the Department of Social Protection and the Department of Education.
The Department of Social Protection will take responsibility for programmes such as the community employment schemes, while further education and training areas will go to the Department of Education & Skills.
There will be a much greater role for the VECs, which will now take over the running of many courses currently provided by FÁS.
Minister for Education & Skills Ruairi Quinn said its mandate would be to ensure the provision of high-quality further education and training programmes to jobseekers and other learners.
Mr Quinn said unemployed people would be entitled to their benefits providing they took up a training course with SOLAS.
He also said the authority would provide courses that relate to new industries where jobs will be created.
Mr Quinn said the new training agency will train far fewer construction workers than its predecessor.
FÁS had turned out far too many construction workers, he added.
The board of FÁS welcomed the announcement.
It said the new authority would provide clear direction for the future of further education and skills training.
Members of the board of FÁS have been invited to serve out their time as members of the new SOLAS board.
The Irish Vocational Education Authority, which represents the country's VECs, welcomed the new body and the strengthened role of the VECs.
The Teachers' Union of Ireland, which represents VEC teachers and lecturers in the Institutes of Technology, also welcomed the development.