The Government is planning to write to senior church leaders to outline plans to allow communions and confirmations to take place in September.
The decision was taken at today's meeting of the Cabinet Committee on Covid-19, which received an update on the current situation from the Chief Medical Officer Dr Tony Holohan, and HSE Chief Executive Paul Reid.
In a statement this evening the Government said the final decision however will still depend on the public health situation at the time.
It noted the recent concerns expressed by church leaders about the health guidelines in relation to religious ceremonies, especially in relation to communions and confirmations.
It said it "hopes" to see those restrictions lifted in September subject to the situation at that stage, and that it will "engage further" with relevant faith group leaders in the coming weeks.
In recent days, a number of bishops across the country have said they would defy public health guidelines and tell priests to start planning ceremonies in the coming weeks.
On Wednesday, the Catholic Archbishop of Dublin had said parents must be trusted to know how to protect their health, and that the current ban on communions and confirmations was seen as discriminatory.
Dr Dermot Farrell wrote to priests in his archdiocese to tell them that they could proceed with the sacraments, despite current public health advice, becoming the first archbishop to direct an archdiocese in this way.
Speaking this evening one priest welcomed the news, saying parents should be trusted not to have parties to celebrate the event.
Enfield and Straffan parish preist Fr Joe McDonald told RTE's Drivetime programme that he is aware of people who are "having a party with no communion".
"One woman said to me, 'ah father, they deserve their day'."
"A small number of people are going to parties, but the vast majority are not organising big parties. We need to trust and have faith in parents," he added.
While it is advised communions and confirmations not take place, baptism services resumed from yesterday, although must follow all protective measures, and social gatherings afterwards are to be avoided.
The Government has said the road out of the remaining restrictions in place across the country lies in a combination of maintaining the current level of restrictions during August until the current wave of disease falls, as well as continuing to roll out vaccines.