The Abbey Theatre plans to redevelop its current site in Dublin after the purchase of an adjacent building on Eden Quay.

The current building on Abbey Street was built in 1966, but the theatre said it was now inadequate for visitors, staff and actors.

After speculation that it could move from its current site, the theatre said the move would allow it to redevelop the venue in the future.

Abbey Theatre Director Fiach Mac Conghail said: "This is a proud day for the Abbey Theatre and a testament to the vision of our board and my management team."

Speaking on RTÉ's News at One, Mr Mac Conghail said that the cost of developing the site would be far less than the €250m price tag assigned to a much speculated about move to the GPO.

"We have purchased this site next door so that we can redevelop, at some point in the future, a new building for the Abbey on our own site," he said.

Mr Mac Conghail said that while the newly purchased property is not in great shape, it was purchased primarily due to location beside the theatre and facing the Liffey.

There is currently no funding in place, either from the State or private funding, but the director hopes that they will turn the sod in 2016.

Minister for Arts Jimmy Deenihan welcomed the purchase.

He said: "I believe that the fundraising focus of the Abbey must now be on delivering the maximum amount of private support possible to allow for development to take place on this site over time."