The Minister for Finance had recommended that NAMA should continue to manage its loan book beyond the agency's expected 2021 wind-down date so as to deliver the best financial return for the taxpayer.
The Department of Finance's second review of the National Asset Management Agency - as required under Section 227 of the NAMA Act - said it should continue its work up to 2025
The NAMA Act requires the Minister for Finance to assess the extent to which the agency has made progress toward achieving its overall objectives.
Minister Paschal Donohoe said today's review reflects the "exceptional progress" that NAMA has made in achieving its overall objectives since 2014.
Since 2014, NAMA has repaid all of its €30.2 billion senior debt and now expects to be in a position to return €4 billion of a surplus to the Exchequer - subject to market conditions.
"Following the review I remain confident that NAMA remains fully on track to achieve its overall objectives and so continues to be necessary having regard to the purposes of the Act," Mr Donohoe said.
Minister Donohoe announced an extension to what was originally planned to allow NAMA to continue to work through a small amount of residual loans in order to maximise the return from these assets.
"These loans represent less than 1% of what NAMA originally acquired and will be resolved during the period 2021-2025 by a much reduced NAMA team which will also manage ongoing litigation appropriately," he said.
The review also recommends that NAMA retain ownership of its social housing vehicle, NARPS, and that NARPS should form part of the assets to be transferred to the State once NAMA has completed its activities.
NAMA chairman Frank Daly said he was pleased that the Minister's review recognises what has been achieved by NAMA to date and that it takes a positive view of NAMA's future prospects.
"The extension of NAMA's remit to 2025 will enhance the return to the State by ensuring the orderly completion of NAMA's work," Mr Daly added.
"This review comprehensively outlines NAMA's success in deleveraging its portfolio profitably and sets out a clear framework that will enable NAMA to plan its activities over the coming years in a manner that maximises the value of its remaining assets for the taxpayer," commented the agency's CEO Brendan McDonagh.
Meanwhile, The European Commission has approved under EU State aid rules a limited extension of NAMA until December 31, 2025.
NAMA was created by the Government in 2009 to buy big portfolios of non-performing commercial loans secured by land and development property from the main five Irish banks.
The purchase of these assets was largely financed by State-guaranteed bonds, which have now been fully repaid.