The Government is to establish two investment funds to use some of the windfall in corporation tax receipts of recent years and to save more into the future.
The larger of the two funds will be called The Future Ireland Fund and will be earmarked for expenditure on healthcare and pensions as the population ages and as other challenges arise from climate change.
Under legislation which will be published later this week, the government of the day will be compelled to save the equivalent of 0.8% of GDP every year from next year to 2035.
Next year, that contribution will be equal to €4.3 billion.
In addition, just over €4 billion which had invested in the National Reserve Fund (NRF) will be moved to the new fund. The NRF, or Rainy Day Fund, will then be dissolved.
The balance of the NRF, some €2 billion, will be invested in a second fund, which will be called the Infrastructure, Climate and Nature Fund.
This will receive no additional investment next year but it is planned that an additional €2 billion will be invested each year thereafter until it reaches a total fund of €14 billion.
The purpose of this fund is to ensure there is no reduction in capital investment when the economy goes into a downturn. It will be run on a more short-term basis than the Future Ireland Fund.
Up to 22.5% of the fund can be used for "climate and nature related capital projects" in any year from 2026 up to a cumulative maximum of €3.15 billion.
The fund can also be tapped for general investment in infrastructure which will take precedence during a downturn.
25% of the fund can be used in a year when there is what is deemed to be a significant deterioration in the public finances.
Both funds will be managed by the National Treasury Management Agency.
The Future Ireland Fund is planned to run on more long-term basis with the returns from investment used in the future, rather than the principal amount invested.
It is expected the fund could grow to €100 billion by 2035.
While the amounts set out do not come close to using up all of the estimated level of "windfall" corporation tax, which is thought to be around €11 billion this year, sources indicate any further surplus will be used to pay down the national debt.
This is projected to fall from approximately €225 billion today to €200 billion by 2030.
Ibec, the group representing Irish businesses, has welcomed the Government's investment ambition set out in Budget 2024, particularly the establishment of the National Infrastructure, Climate and Nature Fund.
However, it cautions that the success of this ambition will be measured by the effectiveness of its implementation.
Constriction Industry Federation also welcomed the Infrastructure, Climate and Nature Fund as a positive and prudent step in providing counter cyclical investment to ensure that vital capital infrastructure projects can continue in the event of a financial downturn.
Shane MacSweeney, Partner and Head of Government & Infrastructure at EY Ireland said the fund future-proofs infrastructure investment.
"All too frequently, infrastructure expenditure is one of the first areas to be cut during an economic downturn, so pre-empting this cycle via the establishment of a new Fund now is welcome long term, strategic decision making," Mr MacSweeney said.