The Cabinet has agreed to ban the sale of tobacco products for those aged under 21.
Minister for Health Stephen Donnelly said he hopes to progress legislation quickly to give it legal effect.
He explained that the Government did not take the approach of the UK Government, which seeks to legislate for a ban on smoking for those born after 2009, due to the EU's Single Market Rules and the Tobacco Products Directive.
However, he said that there is an ongoing review of the EU position.
Minister Donnelly said that vapes were not included in this ban as it was not suggested in the "clinical advice" the Department recieved.
He also said that vapes are used as a "smoking cessation tool".
Mr Donnelly also confirmed that those aged 18-21, working in retail, will not be prevented from selling tobacco products.
Ireland will be the first country in the EU to take the measure and it comes 20 years after Ireland became the first country in the world to ban smoking in workplaces, including pubs and restaurants.
Currently, 18% of the population over the age of 15 are smokers.
The new proposal is designed to reduce Ireland's adult smoking rate to less than 5%.
Smoking and exposure to second-hand smoke kills an estimated 4,500 people a year in Ireland.
The Government said evidence shows that people are at high risk of becoming smokers between the ages of 18 and 21.
In a statement, it added that raising the minimum purchasing age will make it harder for young people to access tobacco products through direct and proxy buys as well as social sources.
Health officials have said smoking causes 13% of all cancers and contributes to many preventable illnesses including respiratory and cardiovascular diseases, eye diseases, diabetes and rheumatoid arthritis.
It is also responsible for 5% of hospital inpatient admissions, while the financial loss caused by smoking is estimated at €10.6 billion annually.
Chief Medical Officer Professor Breda Smyth said: "Our smoking rates are still unacceptably high, so I am delighted that we are progressing a strong population protection measure that will help bring us closer to the goal of a tobacco-free Ireland."
The Bill will provide that the prohibition on tobacco product sales will not apply to those who are currently between the ages of 18 and 20.
The proposed legislation will not impact the minimum legal age of sale of nicotine-inhaling products or vapes.
Since December, the sale of vapes to under 18s has been banned. There is currently no proposal to extend this ban to the age of 21.
The Government said preliminary legal advice suggests Ireland cannot pursue a "smokefree-generation" policy as has been suggested in other jurisdictions because of the EU's single market rules and Tobacco Products Directive.
Use of nicotine pouches by students 'alarming' - Taoiseach
Taoiseach Simon Harris described as "alarming and concerning" the use of nicotine pouches by students.
"That sounds like quite an alarming and concerning situation for parents and teachers alike," he told the Dáil.
He said that he shared the concerns of Social Democrats TD Jennifer Whitmore who said that while nicotine pouches are five times stronger than cigarettes, their sale is unregulated.
She described how the nicotine pouch "goes under your gum".
"Children are using these in school at the moment, and teachers do not know that they have them under their gum.
"They're highly addictive. They're marketed to teens," the deputy said, and urged that the Government "get ahead" of the issue.
Mr Harris said he would raise the issue with the Minister for Health.
