A major investment by Glanbia in Belview on the Kilkenny-Waterford border is to create 1,600 direct and indirect jobs.
The 20 hectare development will process 700 million gallons of milk annually, require more than €150m in capital investment and should be open for business in 2015.
Taoiseach Enda Kenny announced that more than 1,500 indirect jobs will be created by the new development.
Work is due to start next month and is expected to create 450 construction jobs, with 76 people directly employed in the facility.
Mr Kenny said Glanbia Ingredients Ireland Limited will contribute an estimated €400 million every year to the economy, with particular benefit to farm families and rural communities.
Enterprise Ireland will part-fund the development. All produce from the new facility will be destined for export markets.
Mr Kenny said it will be the largest single dairy investment in the history of the State.