The boss of the Health Service Executive has told the Department of Health that he will take a leave of absence from his role on the board of a US company he serves on.
Mr O'Brien will not resume his work with Evofem Biosciences until he leaves his role as HSE Director General in around 12 weeks.
This has also been confirmed by Tánaiste Simon Coveney in the Dáil who said it was the appropriate course of action.
There were repeated calls in the Dáil again this morning on Mr O'Brien to resign from the HSE.
The Tánaiste insisted however that the Government takes a different view.
He said the Government believes Mr O'Brien can best serve people by remaining in his job until he is due to retire in a few weeks time.
Mr Coveney told the Dáil that natural justice cannot be set aside and the focus must remain on getting answers to the CervicalCheck controversy.
He said rather than leaving his job early, Mr O'Brien will instead be asked to provide as much detail as possible about the CervicalCheck screening programme.
He said it was important not to shoot first and then ask questions later.
At the end of the five hour meeting of the Oireachtas Health Committee yesterday, Mr O'Brien said he recognised that he was the head of an organisation that had made mistakes.
But he said he did not personally "cock up" so he would not take responsibility for it.
He was responding to the Sinn Féin TD Louise O'Reilly who asked Mr O'Brien whether he agreed with Taoiseach Leo Varadkar that there had been a "cock up".
In the Dáil yesterday, Sinn Féin Leader Mary Lou McDonald described it as "a national scandal."
She said there has to be accountability and wide-ranging change in the HSE and this must start at the top.
Ms McDonald said it is the product of toxic leadership. She said that Tony O'Brien should be removed from his post.
It comes as the woman whose court case brought the CervicalCheck controversy to public attention said she wants to see a Commission of Investigation that is urgent, prompt and public.
By the time she had another smear test in 2014 she had cervical cancer.
Today Tánaiste Simon Coveney was asked by Fianna Fáil's Dara Calleray if Ms Phelan's case was part of a quarterly briefing on sensitive cases provided to the Cabinet by the State Claims Agency.
Mr Coveney said the case was not on that list.
It emerged last night that the Government is likely to establish a preliminary scoping inquiry, followed by a Commission of Investigation, into the cervical smear controversy.
It follows a meeting between Minister for Health Simon Harris and Opposition parties. An international expert is likely to lead the inquiry.
A helpline was set up to answer questions from women who may be concerned about their test results.
The HSE said more than 7,000 calls have been received by the CervicalCheck helpline in recent days, many from people with normal screening test results.
It says it is trying to advise women to visit CervicalCheck.ie where there is a question and answer section and updated information.