The interest bill on the national debt will fall below €3.5 billion this year, despite an increase in the overall level of debt.
This will be less than half the record interest of almost €8 billion paid in 2013.
The General Government Debt stood at €219.5 billion at the end of 2020.
The average interest rate Ireland pays on its debt is now at a record low of 1.5%.
The average rate on debt issued in 2020 was 0.2% with bonds issued at a weighted average maturity of 11.5 years.
The figures are contained in the 2020 Annual Report and Mid Year Business Update from the National Treasury Management Agency (NTMA) published this afternoon.
Speaking at the publication of the report, the chief executive of the NTMA, Conor O'Kelly, said Ireland's interest bill is expected to remain below €4 billion a year until 2025 at the earliest.
He also said the 'refinancing risk' faced by Ireland in the second half of this decade 'may be overstated'.
This is the cost of refinancing bonds which come up for maturity.
Mr O'Kelly said the NTMA had followed a strategy of borrowing at current lower rates for longer periods into the future as 'insurance' to allow time for the public finances to recover and against rates going up.
He said only 5-7% of Ireland's stock of debt will need to be refinanced each year over the next decade.
So far this year, the NTMA has issued €13.25 billion in bonds at a weighted average yield of 0.15% and an average maturity of 14.6 years.
This is almost 75% of the target range of between €16 and €20 billion to be raised this year.
The low rates reflect the ongoing intervention in debt markets by the European Central Bank which have kept borrowing rates low for governments across the euro area.
The report also notes that returns on the Irish Strategic Investment Fund (ISIF) rose from 6.2% to 8.8%.
Speaking at today's publication, the Minister for Finance Paschal Donohoe paid tribute to the work of Conor O'Kelly as head of the NTMA.
Mr O'Kelly is scheduled to retire next year.