Premier Lotteries Ireland has been selected as the preferred applicant for the next National Lottery licence.

The consortium is made up of the Ontario Teachers' Pension Plan, which owns the Camelot Group, An Post and An Post pension funds.

It will retain the licence for 20 years from next October after making a €405m bid.

Discussions on finalising the terms of the licence will begin shortly with the Department of Public Expenditure and Reform.

It is understood that €200m of the agreed sale price has been earmarked for the new National Childrens' Hospital.

The remaining €200m will go towards general Government expenditure.

The sale price of €405m was considerably higher than observers had expected.

It also comes as ministers finalise discussions on the Budget.

G-Tech, which operate the Italian lottery, was also in the race to buy the National Lottery.

The National Lottery currently employs 110 staff.

Under the next licence, the ongoing annual contribution to Good Causes will be set at 65% of Gross Gaming Revenues, which are defined as Sales minus Prizes.