Sean Quinn one of the country's best known businessmen has bought health insurer BUPA.
The development means the company will continue to operate in Fermoy, saving 300 jobs, and will continue to service its customers.
It will also honour existing contracts and take new business in the coming weeks while the takeover proceeds.
As a new insurer the firm won't be liable to risk equalisation premium payments for three years.
Under risk equalisation, health insurance companies with younger customers have to pay money to rivals with older customers because the latter are higher risk.
Bupa Ireland said in December it would leave Ireland following the introduction of risk equalisation which it claimed forced it to hand over €161m in compensation to VHI over three years.
CEO Sean Quinn said: 'We believe our agreement with BUPA presents an opportunity for real competition in the Irish Health Insurance market'.
He added that a review into the health insurance market recently announced by Health Minister Mary Harney will lead to a 'more open and competitive landscape in this market'.
Vhi Healthcare said :"it welcomes all new entrants to the health insurance market, provided they are committed to the market in the longer term and not seeking the type of hit and run activity we have experienced in this market to date".
VHI said that immediate clarification is required on the status of any existing BUPA business that is taken over by the Quinn Group.
"Our understanding is that this business has effectively come out of the risk equalisation exemption period since January 1, 2006, and must therefore continue to contribute to the community risk".
VHI said that any other outcome would effectively undermine Government policy on community rating and be disastrous for the insured public in the longer term.
Cork Chamber CEO Conor Healy said : "this is very good news following on the recent loss of jobs at FCI and at Motorola. This is very positive for the employees whose jobs will be saved and for Fermoy town".
The Quinn group is one of the country's largest businesses and has business interests ranging from financial services, to property, hotels, manufacturing, cement, glass and radiators.
The Quinn group has an annual turnover approaching the €2bn mark and employs 4,600 people from Co Cavan to Russia.
Earlier this Mr Quinn spent more than €500m buying a 5% shareholding in Anglo Irish Bank.
Insurance giant Axa had expressed an interest in buying Bupa earlier this month. However, Bupa, strongly rejected Axa's advances.
