Around 2,000 Permanent TSB customers who had lost tracker loans are set win back their low interest mortgages.
The bank said it was withdrawing its Supreme Court appeals relating to two sets of mortgage customers who sought to switch to back trackers and said it would review 80 similar cases where complaints had been made.
Industry sources say the total number of customers affected is likely to be in the region of 2,000. The average cost to the bank is expected to be in the region of €10,000 to €15,000.
The bank had previously offered tracker customers the ability to switch to a fixed rate temporarily, however a number of them complained to the Financial Services Ombudsman after they were prevented from switching back to their original deal.
The FSO subsequently ruled that the bank had not made it clear to customers that leaving their fixed rate early would result in the loss of their tracker rate.
This was upheld by the High Court in 2012 following an appeal, and the bank had planned to appeal that decision to the Supreme Court.
However, PTSB now plans to withdraw that appeal and said it wished to review a number of similar complaints received by the ombudsman.
The bank said it was also reviewing how it had dealt with all cases of customers in similar positions and said it would contact any affected once this was completed.
A spokesperson for PTSB also confirmed that the issue was subject to an ongoing enforcement investigation by the Central Bank, on which it was engaging.
The FSO said it welcomed the bank's withdrawal of its appeals and said it looked forward to "satisfactory closure" for all those who had made complaints of this nature to its office.
It said the decision means the High Court judgement remains in place and this broadly endorsed the FSO's approach to the matter.