The Minister for Communications, Denis Naughten, has defended the decision to remove the cap on the cost of postage stamps.
Mr Naughten said he made the decision after negotiations with An Post, which he said is in a very difficult financial state.
An Post says its business is under massive pressure.
Postal services will cost €50 million this year and the company says it has been left with no alternative but to seek an increase in the price of a stamp.
A standard stamp in Ireland costs 72 cent. This is at least 20 cent lower than the price in many EU countries.
The minister has defended the decision, saying he wants to see the five-day postal service retained.
He believes the measure is needed to secure the viability of the semi-State company, which employs 9,000 people.
This measure, he says, will give An Post a window of opportunity to improve its circumstances.
In a statement, the minister said the Government has approved "legislation to provide for the repeal of Section 30 [price regulation] of the Postal Services Act, 2011."
Mr Naughten said An Post "will be given greater pricing freedom for mail products. No price increase will take place until the legislation is enacted and until the legislation is enacted and until I make a commencement order in the New Year."
Earlier, the Irish Postmasters' Union warned that the removal of the cap on the cost of postage stamps will only reduce the volume of business and threaten the postal service.
The chief executive of An Post has said the company is well behind others in Europe in hiking their prices and it needs to be competitive and realistic.
Speaking on RTÉ's News At One, David McRedmond said that postal services are under massive pressure, with electronic substitution causing big volume declines.
He said postal services will cost €50m this year and it "can't keep cross subsidising it from other businesses".
The company, he said, was left with no alternative in the medium-term but to seek an increase in the cost of a stamp.
He said the An Post model needs to be examined to ensure "An Post is here for the long-term".
Meanwhile. the General Secretary of the Communications Workers Union, which represents 8,000 An Post workers, has said he believes the price of a stamp had to be increased.
Speaking on RTÉ's Drivetime, Steve Fitzpatrick said that the cost of a stamp is a lot less when compared with other European countries.
He said An Post is one of the most efficient in Europe, and the company has a responsibility to manage change to take account the impact of its employees.
He said: "An Post employs almost 10,000 people and every delivery office in provincial and rural Ireland is like a small factory and creates economic activity that wouldn't be there without that service, as well as the fact that it also links together communities.
"I'm encouraged to hear the Minister say that he intends to keep the universal service obligation."
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Bin charge dual billing deferral
Minister Naughten, whose department also covers environmental issues, also brought a memo to Cabinet seeking the deferral of next year's planned introduction of dual billing for bin charges and also to defer the requirement for waste operators to allow customers to opt in to the previous pay by weight service.
Under planned dual-billing those paying a flat charge would also get an outline in their waste bills of how much they would be liable to pay under a pay by weight system.
However, Mr Naughten wants this deferred pending a review of waste charges.
He wants to bring in a more flexible pay by weight system which would incentivise people to reduce and separate their waste.
Mr Naughten said that based on the feedback he had received from the public, he had engaged with the waste industry to introduce a pay by weight system that would not only reduce waste but more importantly ensure a fairer system is introduced that allows all homes to reduce their waste bills.
Last July, plans to introduce a pay by weight system across the country were postponed over concerns that some companies were increasing their prices to coincide with the move.
It was also agreed to freeze charges for a year pending the review.
