The Cabinet has agreed a deal with Eir that will see 300,000 premises in rural areas around the country removed from the National Broadband Plan.
Instead, Eir will connect the homes and businesses to high speed broadband between now and the end of next year.
The Government has also announced that 84,500 premises have been added to the intervention area because planned commercial investment to connect these buildings has not materialised.
The plan will have an impact on the tendering process currently under way for the two contracts to connect the remaining homes and businesses inside the intervention strategy.
Three companies, Eir, SIRO and enet, have been shortlisted for the final phase of that contest.
Earlier, sources suggested the removal of 300,000 premises from the tender, many of which may have cost less to connect to a high speed network due to their location compared to more remote properties, would make the State contracts less attractive for the bidders.
In a statement this afternoon, SIRO said it noted the decision by the Department of Communications, Climate Action and Environment to reduce the scope of the National Broadband Plan intervention area, adding:
"We will now take time to review whether this changed scope impacts the viability of SIRO’s participation."
Enet Chief Executive Conal Henry said the company noted the announcement by the Government and Eir.
He told RTÉ News that enet remains confident that if the process is administered fairly, the outcome will be a positive one.
The department says the agreement with Eir means the map of the areas that the National Broadband Plan needs to reach can now be finalised.
More than 90% of the connections by Eir will be over fibre to the home (FTTH), technology which can typically support speeds of up to 1Gbps.
The remaining 10% will use VDSL technology.
The Government predicts that by the end of next year, up to 77% of premises will have access to high speed broadband, up from 52% in 2016.
It claims that by the end of 2020 the majority of the remaining homes and businesses will be able to access high speed broadband.
It has not said when the entire population will be able to get high speed connectivity.
The Eir agreement commits to connect 95% of houses at the standard regulated connection charge.
It also guarantees that all the 300,000 premises will have a minimum download speed of 30Mbps and 6Mbps upload.
Under the agreement the new Eir infrastructure also has to be made available to other competitors in the area and to those who win the National Broadband Plan tenders.
Addressing a press conference, Minister for Communications Denis Naughten said his primary focus since becoming Minister has been on delivering high speed broadband.
He said the agreement with Eir would lead to a dramatic improvement in connectivity in rural Ireland.
The Eir deal will involve an initial two year investment of €200 million.
Mr Naughten said the contract with Eir will be published and the company will be held to account over its promised delivery of the 300,000 connections by the end of next year.
There will be financial penalties if Eir does not complete the contract to target, but the minister would not say what these will be.
The deal with Eir will mean 542,000 premises involving 990,000 citizens will now have to be connected under the National Broadband Plan intervention strategy.
Mr Naughten said the Eir plan would allow the remainder of the premises in the intervention area to be connected far quicker - however he would not give a specific date by which everyone would be brought online.
"My focus is on delivery, not dates," he said.
The 84,500 premises added to the intervention area are in urban and suburban areas where people are currently unable to get high speed broadband.
The department says it wants to hear from anyone in urban and suburban areas who cannot get high speed broadband. They can email email@example.com.
Anyone wishing to see whether they are in the intervention area or not can visit an interactive map at www.broadband.gov.ie.