The reopening of all pubs, bars, nightclubs and casinos has been deferred until 10 August.
Taoiseach Micheál Martin said it was decided not to move to Phase 4 of reopening society and business next Monday as had been planned.
The rate of transmission of the disease in the country is now estimated to be between 1.2 and 1.8, and the Government says a priority is to get it back below 1.
The Licensed Vintners Association said the decision to delay the reopening of all pubs was a "hammer blow" and that the very future of the pub trade in the country is now at stake.
In a statement, it said: "Some 7,000 pubs and 50,000 jobs are now dependent of a meaningful and urgent response from the new Government."
It said pubs were the first sector to close, on 15 March, at the beginning of the Covid-19 crisis and will be the last to reopen.
Pubs that are currently open are only allowed serve alcohol to customers who purchase a "substantial" meal costing at least €9. Customers should only be on the premises for one hour and 45 minutes.
Pubs that do not serve food were due to reopen on 20 July but Cabinet has now decided to postpone that.
Mr Martin acknowledged that the delay to Phase 4 is very disappointing for publicans.
Taoiseach Micheál Martin says that pubs serving food can remain open once they are fully compliant with public health advice. He adds that social visits to people's homes will be limited to a max of ten people from no more than 4 households |Live updates: https://t.co/lO3UtylU2V pic.twitter.com/TQ93psAjCX
— RTÉ News (@rtenews) July 15, 2020
Minister for Health Stephen Donnelly said ''it is difficult news for pubs across the country'', as the Government reverts to the original August date of reopening.
The vintners said that businesses are "now required to go 40% of the year without trading" and that "compensation and support is now essential" if the sector is to survive.
The LVA said that specific financial supports for pubs are required, and called for "immediate discussions" with the Government on protecting the future of the industry.
LVA Chief Executive Donall O'Keeffe said: "It has to be acknowledged that the pubs who are closed were not responsible for the growing levels of infection reported by NPHET over the last week. Yet it is those same pubs who are being asked to take a further financial hit.
"These pubs, who have done nothing wrong, who have acted responsibly and who have obediently followed the guidelines are now being asked to do more. They are being told to delay reopening because of a spike that happened while they were still closed.
"Pubs have and will continue to play their part in protecting public health, but Government must now play its part too.
"They must take immediate action to ensure the survival of the trade, which is so integral to the recovery of the social and business life of villages, towns and cities right across the country."
Kerry TD and Kilgarvan publican Danny Healy-Rae said he is "gutted" for publicans in rural Ireland and hit out at what he said was urban based advice.
He said two-thirds of pubs in Dublin served food and so could open, and he said it was probably the same story in Cork City, he added. "Once Dublin is sorted out, they don't care about the rest of the country."
He also said he was "gutted for the people" who have no other outlet and who like their chat and a few pints and who have sacrificed this for the past months.
Meanwhile, asked if keeping the pubs closed would lead to more house parties, the Taoiseach Martin said: "I understand the argument, but I think these measures are designed to protect people and with the R number going up, the less gatherings the better."
In a bid to tackle house parties, the Government said that social visits to people's homes should be limited to a maximum of ten people from no more than four other households.
Hotels disappointed at decision on gatherings
Meanwhile, hoteliers have said they are disappointed at the Government's decision not to increase the size of gatherings until 10 August.
Irish Hotels Federation President Elaina Fitzgerald Kane said health and safety of everyone is their priority. But added: "This 'one size fits all' decision doesn't fully reflect the capacity of hotels or their proven track record in managing large gatherings safely."
She said the lack of certainty puts thousands of hospitality jobs at risk at a time when many hundreds of hotels and wedding venues are struggling to survive, particularly those for whom weddings and other family gatherings are the mainstay of their business.
She added: "Hotels are already operating in a very challenging environment with average capacity of about 26% for the summer months compared with about 90% last year.
"Today's decision adds to this pressure and we are calling for greater clarity around Phase 4 reopening, including linking of gathering size to venue capacity, as well as providing sector specific measures.
"The requirement for the July stimulus package to contain substantial supports is all the more important now given today's announcement."
