The Minister for Children has announced a once-off support payment for childcare providers.
In a statement, Katherine Zappone said the move is in recognition of the additional administration costs the services have faced this year.
The additional payment will be, on average, €1,500 per provider. The exact amount will depend on the size of the service.
Ms Zappone said the money will be paid in the coming days.
The announcement of the €7m fund is in addition to the programme support payments already given to providers for this year.
The Federation of Early Childhood Providers said it welcomed the minister's recognition of the difficult year that providers have endured.
It said the one-off programme payment would help alleviate some, but not all, of the immediate financial difficulties the services face.
Earlier, the Taoiseach rejected calls to set up an emergency fund for crèches facing increased insurance costs.
Leo Varadkar said that for the State to become involved would be "reckless".
He was responding to calls from Sinn Féin leader Mary Lou McDonald following reports this week that some crèches and pre-schools may be forced to increase fees in the new year because quotes to renew insurance cover are so high.
A number of other facilities said they could have to close if they cannot get cover.
Ms McDonald called for an assurance to childcare providers that face "extortionate" increases in insurance costs that the State would intervene.
She said the priority was that people will have assurance that their children will have a place and workers will have jobs.
Mr Varadkar told the Dáil he was confident the situation would be resolved and was under control.
Fianna Fáil leader Micheál Martin said the insurance crisis was causing real stress and anxiety for businesses and parents.
He said: "The Government response to date so far been very confusing, has been very slow off the mark and it is incredible the degree to which the Government has been caught by surprise.
The Federation of Early Childhood Providers said the Government needs to work to provide an alternative insurer for the sector as "the problem will not go away with one payment".
In a statement, it said "childcare places also need to be funded on an annual basis and not on an hourly basis as with the new NCS (National Childcare Scheme)".
Early Childhood Ireland welcomed the additional support payment announced by Minister Zappone.
A spokesperson said it was welcome in light of a difficult year for providers who have had to deal with a number of additional issues.
She said the insurance issue has tipped members over the edge and she hopes the Government can get the additional payment over the line by 28 December.