€30 million is to be provided by the Government over a three-year period to make the post office network more sustainable.
The funding will be the first time that direct financial support will be provided to postmasters who run much of the post offices around the country.
The funding will be partly distributed in a fixed and guaranteed element and partly in a variable, performance-based element, which will be decided in negotiations between An Post and Irish Postmasters Union (IPU).
Minister Hildegarde Naughton, who has special responsibility for Postal Matters said the money would provide certainty for postmasters and the public, enabling new commercial initiatives and services to be developed.
"Post offices play a central role to both society as a whole and to Government through the provision of high-quality public services in towns, villages and cities right across the country," she said.
"I am confident that this €30 million multi annual scheme, amounting to €10 million each year for three years, will protect our post office network and will ensure that families and businesses nationwide can continue to access services from within their own communities."
An Post has statutory responsibility for the State's postal service and post office network.
Of the 933 branches, 888 are run by independent postmasters who operate them as small businesses contracted by An Post.
The postmasters are not paid a fixed salary but receive fees based on the number of transactions they carry out.
However, many postmasters have seen their income drop in recent years as transactions fall, prompting in some cases the closure of offices.
A recent report conducted by Grant Thornton on behalf of the IPU found that the annual financial shortfall of the network is now an estimated €12m.
The report concluded that the network has the skills, capacity and willingness to provide additional services for the Government in return for investment that could take the form of an annual contract fee.
The Government said today that it is committed to working with An Post and postmasters to ensure that the network continues to play a strong role in delivering State services.
An Post said it welcomed the announcement and that it will continue to drive the transformation programme to support the renewal and development of the network and the expansion of new services.
"Over the last three years, An Post has invested more than €60m to transform the Post Office network and build a sustainable business for Postmasters," said Debbie Byrne, managing director of An Post Retail.
"Additionally, a Pandemic Relief fund of €8.5m was made available to support Postmasters and cushion the effects of lost revenues as they kept their doors open to serve communities during the Pandemic."
Ned O'Hara, General Secretary of the Irish Postmasters Union, welcomed the decision and said it is something they have been seeking for some time.
Speaking on RTÉ’s Drivetime, Mr O’Hara said it gives postmasters "some certainty in an uncertain world".
He said they welcome and appreciate the efforts made to get this over the line, and they are looking forward to working out the details with An Post.
"It’ll be used to support postmasters who are not currently viable, and we would argue that most postmasters are in that position because of circumstances and the nature of the business that we do," he said.
"We did agree a new contract with An Post with 2018 and we had transformation arrangements to allow us to make that transformation, but Covid interrupted.
"During Covid, we feel we were designated an essential service. We provided service above and beyond the call of duty."
What they had looked for was some certainty for the next three to five years, Mr O’Hara said.
He said they recognise that the world is changing, and while there "may not be a post office in a hundred years’ time", there will be one for the next three to five years.
