Agreement has been reached between St Vincent's University Hospital and the National Maternity Hospital Holles Street on the transfer of the maternity hospital to the St Vincent's campus in Dublin.
If follows talks brokered in recent months by Kieran Mulvey, former head of the Workplace Relations Commission.
A dispute broke out earlier this year between the hospitals, relating to governance and independence.
During the controversy, issues were raised about the logistics of Holles St moving to the site of a separate existing major hospital and questions were also raised about protecting the ethos of the National Maternity Hospital.
Governance procedures have been agreed whereby a new company will be established called The National Maternity Hospital at Elm Park DAC, which will be a subsidiary of St Vincent’s Healthcare Group.
Minister for Health Simon Harris has welcomed the deal and said that subject to planning, the facility could be open by early 2021.
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The new company will have clinical and operational independence in the provision of maternity, gynaecology and neonatal services, as well as financial and budgetary independence.
Under the deal, the board of the new company will comprise nine directors; four nominated by the St Vincent's Hospital Group, four by the National Maternity Hospital, including the Master and one will be an international expert in obstetrics and gynaecology.
The chairperson will rotate every three years; one of Holles Street's nominated directors will be the first chair.
The autonomy of the Holles Street board will be underpinned by reserved powers to ensure clinical and operational independence.
Both hospitals are voluntary institutions with their own boards and governance systems.
In the case of Holles Street, it has a Master system whereby an obstetrician runs the facility rather than a professional manager.
The cost of building the new hospital is estimated to be around €150m.
Government approval for the project was given in May 2013 and it is included in the HSE's capital plans.
The planning documentation for the project will now be reviewed and a Strategic Infrastructure Development application will be made to An Bord Pleanála early in the New Year.
"I appreciate the significant efforts made by both hospitals over recent months to reach a resolution," Mr Harris said.
"The National Maternity Hospital is a national treasure and has cared for many thousands of women and infants down through the years since it was built in 1894," he continued.
"The move to the Elm Park Campus will ensure the continuation of the ethos and tradition of the National Maternity Hospital, in a modern environment which meets best international standards".
Master of Holles Street Dr Rhona Mahony said the agreement protects the clinical independence of the hospital and will continue to provide all of the care currently delivered there.
The funds from the sale of the old hospital will go to the HSE, towards the cost of building of the new facility, she added.
