Fianna Fáil TDs and senators will be allowed a free vote on the Government’s Protection of Life during Pregnancy Bill 2013.
The decision came after a parliamentary party meeting could not reach consensus on the measure.
Fianna Fáil has been deeply split on the abortion issue.
Party leader Micheál Martin and a number of frontbenchers favoured backing the Government.
However, motions passed at the party's Ard Fheis opposed allowing the risk of suicide as grounds for a termination, a central feature of the proposed legislation.
There are deep divisions within the 19-strong parliamentary party.
Some senators have conscientious objections to the proposals and a number of Fianna Fáil TDs also oppose it.
A spokesman for Mr Martin rejected any suggestion that his leadership had been damaged, insisting the issue was a unique one involving a profound matter of conscience.
Elsewhere, a senior Vatican official has said Catholic legislators should resign their party whip rather than support the legislation.
Speaking to the Irish Catholic newspaper, Monsignor Jacques Suaudeau said that if Taoiseach Enda Kenny does not want to impose his Catholic belief on people, and the time has come for a more moderate line on abortion, then he too should resign.
The Monsignor, who is Scientific Director of the Pontifical Academy for Life, also warned that legislators cannot hide behind the Nuremberg Defence - a claim that they are just doing their duty.
He said that if an act is evil and you receive an order to do it, then you cannot do it.
A senior Irish cleric has said legislators should not empower the threat of suicide by giving it rights over the life of an unborn child.
Monsignor Brendan Byrne also appealed to those supporting suicide as grounds for abortion to listen to warnings from experts in suicide prevention that the Government's proposed law will serve to normalise suicide in Ireland.
Monsignor Byrne, who has been the Administrator of the vacant Diocese of Kildare & Leighlin for the past three years, made his comments in a statement on the Protection of Life during Pregnancy Bill 2013.
Meanwhile, the Oireachtas Health Committee has published a report outlining the submissions it heard on the legislation earlier this month.
The hearings took place over three days.
The two-volume, 1,600 page report makes no recommendations, but summarises the evidence it heard.
The report also outlines a large number of written submissions it received.
Committee chair Jerry Buttimer said its work had been another example of how parliament could function.
He said it held detailed hearings on sensitive and political matters in a respectful and tolerant manner.