US group PayPal has confirmed that it will create 1,000 jobs in Ireland.

The new operation will be located in Dundalk, Co Louth, and recruitment is expected to begin this summer.

PayPal said that 200 jobs will be created immediately, with the remaining coming over the next four years.

The company processes online payments and is a subsidiary of online auction site eBay.

The operation will be engaged in account management, risk management and provide customer support for PayPal's operations in Europe, the Middle East and Africa.

The news has been warmly welcomed throughout the northeast and the local chamber of commerce said today is one of the best days ever for the town.

Louth County Council's Michael O'Dowd said the announcement was the culmination of a lot of work, while County Manager Conn Murray said it showed the area had much to offer.

The company's vice president Louise Phelan said that PayPal considered locations abroad before choosing Ireland.

"Our new employees will be joining PayPal at an exciting time.

"Our vision is to help people pay for things anytime, anywhere and on any type of electronic device," she added.

Making the official announcement this afternoon Taoiseach Enda Kenny said: "This is a great signal of confidence in Ireland and in our talented workforce.

"It is a clear recognition of the opportunities that Ireland offers global leaders like PayPal."

He said Ireland's package of tax, talent and knowledge has made Ireland one of the best places in the world to invest.

PayPal has been in Ireland since 2003 and the group already employs 1,500 in Blanchardstown in Dublin.