Tánaiste Micheál Martin will bring forward proposals in a number of weeks on a consultative forum to address Ireland's broader foreign policy, including neutrality, it is understood.
The forum is expected to be chaired by an expert or academic and will bring in international figures to contribute to an overall consultation on Ireland's foreign and defence policy, given the war in Ukraine.
The consultative forum will borrow from recent Citizens’ Assemblies and the Shared Island dialogue.
However, it will not focus exclusively on what one source called a "binary" discussion on neutrality.
It is understood the forum could be up and running by the summer, although the terms of reference have not yet been concluded.
The source said the forum would inform the government’s foreign and defence policy.
Speaking earlier on his way into an EU leaders' summit in Brussels, Taoiseach Leo Varadkar said: "The Tánaiste is developing proposals on that and at the right time, and at a time of his choosing, I think he’ll tell you more about it.
"But he has developed proposals as to how we could consult with stakeholders and the public in a meaningful way on how our defence and security policies should evolve."
Asked if a Citizens' Assembly might form part of those proposals, the Taoiseach said: "It wouldn't be fair for me to half announce a proposal that he's developing at the moment. So I'll leave it to the Tánaiste and Minister of Defence to do that."
Mr Varadkar said Ireland's neutrality was not under any scrutiny at EU level.
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He told reporters: "There are four countries in the European Union that are not members of NATO and don't intend to join NATO.
"And there's a very good and fair understanding of our position and our particular sensitivities and cultural politics around that. I've never for a second felt under any pressure from other prime ministers or presidents to change our position on it."
He said Ireland was militarily neutral, meaning it was not part of any military alliance, but "we're not politically neutral".
"We’ve always been on the side of the west, on the side of democracy and on the side of freedom. And that's particularly the case now that we're facing this war in Ukraine."
He said Ireland participated in PESCO, the EU's security and defence cooperation platform, and also in the European Defence Agency.
"We're a member of EU battlegroups. So, our neutrality needs to be seen for what it is," Mr Varadkar said.
Last night, EU leaders approved the creation of a €2bn fund to procure one million artillery shells and precision munitions for Ukraine by the end of the year.
It will be channelled through the European Peace Facility (EPF), an off-budget mechanism increasingly used to provide military support for Ukraine.
Ireland provides non-lethal support, such as protective gear and medical supplies, through a separate EPF track.
Public must be 'centrally involved'
Opposition parties have given a mixed reaction to news that the Government is going to establish a consultative forum to examine Ireland's international security policy.
Sinn Féin's Defence Spokesman John Brady TD said he wanted to see the public "centrally involved" in any discussions.
He added that over the past year there had been a "an erosion in terms of military neutrality".
People Before Profit TD Richard Boyd Barrett said: "no matter what why they spin it, the Government are trying to undermine neutrality despite the fact the majority of people in this country believe we should remain a neutral country".
However, both the Social Democrats and the Labour Party have welcomed the news that the Government will establish a consultative forum.
Gary Gannon TD, the Social Democrats spokesman on Defence said there needed to be a discussion about Ireland's defence capabilities.
However, he said there was no desire for a joining NATO or a change in neutrality.
Labour Party senator Mark Wall said it would be important to include political parties in the consultative forum.
He added "Ireland must, and actively continue to play our part in building and promoting peace throughout the world." He added neutrality had served Ireland well.
