The Cabinet has signed off on the estimated €2.7bn redress scheme for homes affected by mica and the extension of the scheme to homes affected by pyrite in counties Clare and Limerick.
Ministers were told the cost of the scheme is expected to rise by €500m since the last estimate of €2.2bn.
The decision gives operational effect to the enhanced scheme announced last November, with a potential 100% grant subject to a €420,000 cap.
A second cap of €145-161 per square foot is also part of the deal.
It is understood the scheme does not cover another defective mineral, pyrrhotite, which has been raised by campaigners.
Mica has the capacity to absorb water, cause concrete blocks to crumble and put entire homes at risk of collapse.
It is estimated Mica affects more than 7,000 homes, many in Donegal and Mayo.
However, the Cabinet accepts that the redress scheme could exceed the current estimate of €2.7bn, due to what's termed as "ongoing engagement" with other counties who could be admitted to scheme in the future.
It's understood that some legal issues surrounding the bill are also being considered by the Attorney General's office.
Mica redress campaign groups said last night that they wanted to see the detail of the legislation before commenting.
The Taoiseach told the Dáil this afternoon that the Government agreed the expanded Mica compensation scheme because "it is time to move on this".
"We need to get going", Micheál Martin said, and "get on with it".
Mr Martin was responding to Sinn Féin's Pádraig Mac Lochlainn who said families "have been let down again and again and again" and called for full scrutiny and transparency in the scheme to be guaranteed.
The Cabinet agreed to request the Oireachtas Housing Committee to agree to waive pre-legislative scrutiny on the bill providing for the scheme.
However, Sinn Féin's Donnchadh Ó Laoghaire said the scheme should be subject to pre-legislative scrutiny in the Oireachtas.
The Tánaiste Leo Varadkar said he believes that the Mica redress scheme is "final" but said any proposals made in the Dáil will be listened to by the relevant minister.
"We want to get this done," Mr Varadkar said. "I've been in those houses, been in homes in Donegal that are crumbling, and it's not just houses that are cracking up, people are starting to crack up as well," he told RTÉ's News at One.
"What we're saying to them is that we want to get this done and we want to get it done quickly. We want to get the legislation done before the summer recess, that means done before next month, we want to get this scheme up and running by the end of the year and next year we want to see hundreds of homes being demolished, rebuilt or repaired."
Asked if today's announcement represents a "final deal" on Mica, Mr Varadkar said: "I believe it is. Of course, we'll listen to what people have to say, the minister isn't ruling out any amendments by the way, the legislation will have to go through the Dáil."
Earlier, Minister for Public Expenditure Michael McGrath described the scheme as a "very significant intervention by the State".
Speaking on his way into Cabinet this morning, Mr McGrath said the Government was determined to press ahead with remediation works as quickly as possible.
Mica redress campaigner Paddy Diver has said those affected "really need the Government to get it right this time", adding that there can be "no more delays, no more false promises".
Speaking on RTÉ's Morning Ireland, he said the Government has had plenty of time to investigate this issue and more delays "just don't make sense".
Mica Action Group spokesperson Michael Doherty said there is a "denial" about how many counties have been impacted and said there are homes in Dublin, Louth, Offaly and Meath that need to be examined.
Speaking on RTÉ's Today with Claire Byrne, he said flaws in the current redress scheme had been hampering progress and the campaign group has made it clear to the Government what is needed to get it over the line.
"We want this nightmare behind us," he said.
Mr Doherty said that due to inflation costs, the €420,000 cap announced in November needs to be raised to €460,000 to ensure the same position.
"We want our homes back but don't see why we should be out tens of thousands [of euro] in order to make that happen. We want to make sure the job is done right," he said.
Additional reporting: Paul Cunningham
