Minister for Social Protection Leo Varadkar has said he is going to replace the JobBridge internship scheme with a more targeted scheme in September.
He said JobBridge was designed to get experience for graduates and help employers get staff during the economic downturn.
The controversial scheme provides work experience opportunities for unemployed people. Participants are offered an internship of up to nine months - which sees them keep their social welfare payment and get an extra €52 per week.
Last week, Minister of State for Training and Skills John Halligan said the JobBridge scheme should be scrapped.
He said: "I think it needs to be replaced. I think the JobBridge as it is presently constituted needs to be replaced ... Right now it is not fit for purpose, we certainly need to replace it."
Speaking to RTÉ News, Mr Varadkar said: "It was very much a scheme for a particular moment in time. It was set up at a time when employers could not afford to take people on, and also graduates in particular could not get any work experience and therefore could not get into employment.
"The economy is now changed, we have a much more vibrant and booming labour market in many ways, and my view now is that the time has come for JobBridge to be replaced."
Mr Varadkar said that when an external review of the programme, carried by out by Indecon, is ready in September, he will then replace the scheme.
He said he will introduce a new programme more appropriate for the current labour market, which will be more targeted at those who are in long-term unemployment, as well as other groups that find it hard to get into the labour market.