Irish Continental Group has agreed a deal with German company Flensburger Schiffbau-Gesselschaft & Co to build a cruise ferry for ICG at a contract price of €144m.
The new cruise ferry will accommodate 1,885 passengers and crew.
It will have 435 cabins and capacity for 2,800 lane metres of freight (165 freight vehicles) plus an additional dedicated car deck with capacity for 300 passenger cars.
Under the terms of the agreement, the new ferry is scheduled for delivery in May 2018.
ICG said that 20% of the contract price will be paid in instalments during the construction period, with the balance to be paid on delivery.
It said intends to use a combination of existing cash resources and loan facilities to finance the cruise ferry.
ICG, which owns Irish Ferries, said the new cruise ferry will probably be introduced on routes served by the chartered ship MV Epsilon, which currently offers year round services from Dublin to Holyhead during the week, and Ireland and France on weekends.
"This investment underpins the confidence the group has in both the freight and passenger tourism markets between Ireland, Britain and France," the company's chief executive Eamonn Rothwell said.
"We expect to be well positioned to accommodate the changing expectations of our customers, and to benefit from significant operational and financial benefits following the delivery in 2018," Mr Rothwell added.
