The Cabinet has approved a package to support businesses and the economies of Laois, Offaly and Kildare.
It includes a 20% top-up of the restart grant for businesses in the region, meaning they will be entitled to an additional payment of between €800 and €5,000.
The package will also include €1 million funding for Fáilte Ireland to undertake a promotion campaign to drive footfall into the counties once the restrictions are lifted.
A further €1m is being ringfenced for the Local Enterprise Offices in the three counties to increase engagement with local businesses to ensure they are aware of the loans, grants and vouchers they are entitled to.
Applications from affected counties will be prioritised for all existing schemes, including the Sustaining Enterprise Fund.
Tánaiste Leo Varadkar said the announcement is "about providing a little bit more help to businesses in Kildare, Laois and Offaly as they manage the next couple of weeks".
He said: "I know the restrictions have come as a blow just as they were getting back on their feet and we need to help out."
Mr Varadkar said the topped-up Restart Grant Plus will provide "some much needed cash" to help with the costs associated with reopening and staying open safely.
"Once restrictions are eased, we want people to come visit the counties so we are also putting money aside for a promotional campaign.
"These measures, in addition to what is already available, will hopefully provide some practical assistance to manage what is an extremely difficult situation," he said.
Minister for Public Expenditure and Reform Michael McGrath told RTÉ News that the package is a "recognition that the restrictions have imposed an economic cost on individual businesses and the local economy".
He said: "The people and the businesses across these three counties have, and are, making a very significant sacrifice for the common good and in the national interest. And that is why it is so important that Government recognises that and comes up with a response.
"Today's package is a response to that. We will stay the course, we will help the local economy and the local businesses across these three counties."
Mr McGrath also said the package can provide a "template" if similar localised restrictions are imposed in other counties.
"We do have to be open to the possibility that further restrictions may need to be imposed in different parts of the country, and so it is useful to have a template now of the type of supports that might be available if that were to be necessary," he said.
"We sincerely hope it won't be necessary and people are making great sacrifices and hopefully further restrictions will not be required.
"But it is a possibility and, if it is, then the Government stands ready to step in and support local businesses and the local economy in areas if that does come to pass."
The Deputy President of the Tullamore and District Chamber has given a cautious welcome to the extra supports for the midlands.
Anthony Hanniffy said the responses to the Covid-19 pandemic have had a huge impact in the region and he said "a lot of businesses have been decimated" in Offaly, Laois and Kildare.
He also said there are challenges in the region that existed prior to the virus.
Mr Hanniffy said "this package of measures announced today is good now, but in the long-term we need a bigger plan for the area".
Minister for Tourism Catherine Martin said she was acutely aware of the difficulties being faced by the tourism and hospitality sectors in the three counties.
She said the €1m Fáilte Ireland campaign "will focus on increasing the appeal of the three counties to visitors and drive bookings".
Minister Martin said the Fáilte Ireland approach will be a mix of "county specific promotional activity" as well as grouping the three counties under their regional experience brand "Ireland's Ancient East".
This day last week the Government announced a tightening of restrictions in the three counties because of a resurgence of the virus.
This meant many businesses had to close their doors including bars, cafés, restaurants as well as gyms, cinemas and other cultural and entertainment venues.
Minister McGrath has said he hopes that restrictions imposed on three counties in the midlands can be lifted next week. However, he said that he cannot guarantee that this will be the case.