Bank of Ireland will redeem €1.3 billion worth of preference shares issued in March 2009 by the Government to bail out the lender.
In 2013, the bank sold the preference shares to private investors, repaying the money to the state. It said it will redeem the shares on January 4.
The move would mark the final step allowing the bank to resume dividend payments. Bank of Ireland is set to be the first bank in the country to resume dividend payments since the 2008 financial crisis.
However, it has to first stop counting the preference shares as capital.
After generating fresh capital during the year, it said today it had gained consent from European regulators to redeem the shares.
"Their redemption at the earliest possible date is beneficial for our ordinary shareholders, while honouring commitments we gave to the 2009 Preference Stock investors in 2013," Mr Boucher said.
"The redemption represents further delivery against a key strategic priority of the group, and is possible because of the progress we continue to make across our businesses, which is reflected in the strength of our organic capital generation," he added.
"While the announcement should not come as a surprise, it is nonetheless a further positive sign of the significant progress achieved by Bank of Ireland in strengthening its capital ratios," Davy Stockbrokers said in a note today.
Bank of Ireland shares were higher in Dublin trade today.
