The Government has reached an agreement with Apple to start collecting the €13 billion owed by the tech giant, it has announced.

"We have now reached agreement with Apple in relation to the principles and operation of the escrow fund," Minister for Finance Paschal Donohoe said in Brussels.

"We expect the money will begin to be transmitted into the account from Apple across the first quarter of next year," he added before a meeting with the EU's Competition Commissioner Margrethe Vestager.

The European Commission ruled in August 2016 that the iPhone maker must reimburse the State a record €13bn to make up for what it considered to be unpaid taxes over a number of years.

The ruling stated that tax benefits received by the tech company were illegal under EU rules, because they allowed Apple to pay substantially less tax than other businesses.

The announcement comes after some tension with Brussels, which referred Ireland to the European Court of Justice in October of this year for failing to collect the back taxes.

The Government must now put the sums in a blocked bank account while waiting for the result of Apple's and its own appeal to the European Commission.