Aviation Regulation Commissioner Cathy Mannion said Ryanair fully accepts that it will have to pay all compensation claims over cancelled flights.
Ms Mannion said the commission is working with Ryanair to address the immediate problem, which a Ryanair spokeswomen has said the airline expects to amount to around €20m in compensation.
She said she would expect and encourage Ryanair to publish the list of flights that have been affected in the coming days.
Speaking on RTÉ's News At One, Ms Mannion also said Ryanair should contact all affected passengers to allow them to plan what they are going to do if they know with more certainty what flights are being cancelled.
"They fully accept that they have to pay up all the rightful compensation claims and all the care and assistance," she said.
She added: "If Ryanair have cancelled your flight, they must offer you an alternative flight at the earliest opportunity or refund your ticket.
"I have heard a number of stories of people out in Europe now and their return flights have been canceled – what that passenger should do is go to the airport... Ryanair have a duty to give you care and assistance."
She added: "It is very important that the passenger stays with a Ryanair flight – that's the way the scheme operates, if they chose to choose a different airline or go home a different way, they won't get the same level of duty or care compensation."
In a statement, the CAR said: "Ryanair is entitled to offer a passenger comparable transport to the final destination if no alternative flight with the carrier is available.
"When a place is served by several airports, Ryanair may offer a flight to an alternative airport to that originally booked. Ryanair is then obliged to bear the cost of transferring you to the airport that you had booked or to another close-by destination agreed with you," it added.
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Ryanair has said that they are not claiming extraordinary circumstances and will be offering customers affected by the cancellations a choice between a place on an alternative flight or a full refund.
In a press conference, the airline's chief executive Michael O'Leary said they would not be claiming extraordinary circumstances.
Earlier a spokesperson for the European Consumer Centre in Dublin said airlines do not have to pay compensation if they can prove that flights were cancelled due to reasons outside of their control and extraordinary circumstances.
Martina Nee said Ryanair's situation, in terms of pilot rostering, is unclear.
Speaking on RTÉ’s Today with Sean O'Rourke, Ms Nee said that she hoped the CAR meeting would provide more clarity.
When it comes to compensation, airlines don't have to pay it if they can prove it's extraordinary circumstances, that it's a situation completely out of their control and they took reasonable measures to avoid it.
"In terms of pilot rostering, it's unclear. I know the Commission for Aviation Regulation is meeting to discuss it so hopefully we'll have more clarity on that."
She said, at the least, passengers should be re-routed or given a refund, as well as money for care and assistance.
Ms Nee advised any affected passengers to keep all their receipts in order to make claims later.
She said: "Keep a note of everything. Keep note of all your emails and everything to show you've been trying to get through to Ryanair and then put your claim in on their website.
"There's a process that you go through on the website to do that. Obviously if you're having further difficulties then you can get in touch with the Commission for Aviation Regulation as well."
The President of the Irish Airline Pilot Association has said there are many reasons why the rostering problem has arisen for Ryanair.
Evan Cullen said there is a global pilot shortage, that many Ryanair pilots are in the holding pools of other airlines, and that many Ryanair pilots have resigned.
He said that the main problem was a significant rule change in how pilot hours are calculated.
Mr Cullen said he does not know why Ryanair has had to cancel so many flights, but added the reality is that Ryanair is losing pilots to rivals.
He said: "Ryanair are haemorrhaging a great deal of pilots to other airlines. For example there are at least three, if not four, airlines in Europe who have holding pools for new hire pilots and they have in excess of 100 Ryanair pilots in those holding pools.
"Those are resignations that Ryanair has yet to find out about. Aer Lingus alone are about to recruit 200 pilots in the next 18 to 24 months, an awful lot of those pilots will come out of the Ryanair base in Dublin airport."
Ryanair says it has informed all passengers whose flights have been cancelled up to and including Wednesday, but the regulations say if the notice given is less than two weeks then compensation must be paid.
Questions have been raised over whether Ryanair can advertise and sell tickets for flights, which it may later have to cancel.
The commission says the legislation does not prohibit Ryanair from doing this, however, the airline will be liable to pay refunds or provide alternative flights and pay compensation if there is not sufficient notice.
Passengers who are booked on flights over the next six weeks have been calling on Ryanair to give them more information.
The financial penalties for not doing so will put more pressure on the airline to give longer notice on which flights it is cancelling.