The Government has secured more than half a billion euro in grants from the European Commission to connect Ireland's electricity network to France.
The Celtic Interconnector will be underwater with 700 megawatts capacity and will mean Ireland has guaranteed access to the European Union’s internal energy market.
The total cost of the project is expected to be €1bn.
When finished it is expected that it will power 450,000 households, and help Ireland to switch to 70% renewable energy.
The Government said the connection is likely to drive down electricity prices for the consumer through increased competition.
Ireland is currently connected to the EU energy market through the UK but once Brexit happens, Ireland will have no such connection. However, the interconnector will ensure access to the EU market.
Taoiseach Leo Varadkar said: "This is a really significant investment for Ireland and will help us to conduct a magnificent feat of engineering. The Celtic Interconnector will help to lower electricity prices, reduce greenhouse gas emissions and provide greater energy security.
"It's a direct result of our close working relationship with the European Commission including President Juncker, and France and President Macron, who will be our closest EU neighbours following Brexit. It's a signal of European solidarity at this crucial time."
Minister for Communications, Climate Action and Environment, Richard Bruton, said: "This vital piece of infrastructure is crucial to delivering the step up required to meet the climate challenge. As well as the clear benefits in terms of improved security and diversification of electricity supply, it will also, importantly, facilitate the further development of renewable energy, helping us meet our 70% target."