Iarnród Eireann and XPO Logistics are to begin a new twice-weekly rail freight service in each direction between Ballina in Co Mayo and Waterford Port.
The new rail service is due to start at the end of June.
It will see the potential for over 5,000 truck movements a year to switch from road to rail, with a resulting reduction in road congestion and a 75% reduction in emissions per unit.
The new service comes as Iarnród Éireann is working on finalising a new national rail freight strategy to identify growth and investment opportunities to significantly grow rail freight operations.
The new rail freight service between Ballina and Waterford is in addition to Iarnród Éireann's existing rail freight operations.
This includes container traffic from Ballina to Dublin Port, pulpwood from Ballina and Westport to Waterford Port and zinc ore from Tara Mines in Navan to Dublin Port.
Iarnród Éireann chief executive Jim Meade said the company is entering a very exciting phase where rail freight can offer key solutions for the movement of freight as the country addresses both environmental and congestion challenges in this sector.
"Today's announcement with XPO and Waterford Port demonstrates the viable opportunities that can be developed that will not just support industry and the logistics sector, but is also fully aligned with the country's climate action plan," the CEO added.
Port of Waterford chief executive Frank Ronan said the port welcomed the re-introduction of rail freight services at Belview.
"These trains, carrying container freight, will work very effectively with the Port's Lo-Lo shipping services to provide businesses in Ireland's West/North West with a compelling logistics solution to and from mainland Europe," he added.
Minister for Transport Eamon Ryan said the way we choose to connect communities and businesses will be critically important as the country looks to halve its emissions by 2030.
"Rail and other sustainable solutions will play an important role on our journey to achieving net-zero emissions by 2050. This new freight service offers a climate friendly option connecting enterprises from the West to the Southeast of the country and onwards to export markets," he added.