Tánaiste Leo Varadkar has expressed his disappointment that CETA's ratification is "not now immediately possible".
The Supreme Court today ruled that the Government cannot ratify the European Union's free trade deal with Canada unless laws are changed.
This poses a challenge to the Government if it wants to avoid the matter going to a referendum.
The Comprehensive Economic and Trade Agreement (CETA) sets out the removal of tariffs on 99% of all goods types traded between the EU and Canada, some over a period of up to seven years.
It has been provisionally in force since September 2017, and has so far been ratified by 16 of the 27 EU member countries, with Germany's coalition agreeing in June to add its signature.
The Government had intended to do so as well through an Oireachtas vote once it cleared the legal hurdles.
Last year, Mr Varadkar said that a delay would send out the wrong message on Ireland's commitment to trade.
However, Green Party TD Patrick Costello challenged it in the courts, arguing that the deal should be put to a referendum because its ratification may affect the ability to introduce regulation, particularly in relation to the environment.
Today, the Supreme Court ruled that the deal is unconstitutional as Irish law now stands and that the Oireachtas would have to make amendments to arbitration laws to permit ratification.
Mr Varadkar, who will take over as Taoiseach in just over a month, said the Government remained committed to ratifying the deal in full and its initial assessment was that it could do so via legislation without the need for a referendum.
"The decision of the Supreme Court is noted," Mr Varadkar said in a statement this afternoon.
"While it is disappointing that ratification is not now immediately possible, the Government remains committed to ratifying the CETA agreement in full.
"It will now take some time to reflect on the wider decision and consider its implications. Our initial assessment is that a referendum is not required and that ratification can follow once some changes are made to domestic law."
In a tweet, Mr Costello said the court's decision was "interesting", adding that that it was an "incredible day".
Very interesting decision in my CETA case in the Supreme Court today. 4-3 decision that the Dail cannot ratify #CETA right now.— Patrick Costello TD (@Costellop) November 11, 2022
Speaking on RTÉ's Drivetime, Mr Costello said that if the costs of being a part of CETA outweigh the trade benefits, questions must be asked about the deal.
"I think we need to really sit and look and say, 'do we want to be part of an investor court?'," Mr Costello said.
"Yes, we get huge benefits from trade, but if those come at a greater cost than we benefit from in terms of the inability to regulate, in terms of workers' rights, or inability to regulate in terms of the environment, then you know, there are questions that we need to be asking."
Some fear investor courts could allow Canadian investors to sue EU governments over policies which disadvantage them.
Mr Costello said that finding a way forward is "not going to be straightforward".
"This is a very complicated thing and I think it's going to take months for people to really think through the consequences of the judgement," he said.
He described the CETA issue as a "deeply complex matter".
"It is unfortunately a very technical thing, a very legal thing, but I think that's what reflects that this is not going to be an easy road and I think what we should really be doing at this stage is asking, 'do we actually want to be part of investor courts?'"
Minister of State for European Affairs Thomas Byrne has said he hopes the CETA agreement gets ratified and added that the benefits of this trade deal are already in place.
Speaking on RTÉ's Today with Claire Byrne, the Fianna Fáil TD said Ireland is not the only country that is "slow" on ratification.
Minister Byrne said he has not read the judgment in the case, but said the Government will have to "consider its response".
He said this trade agreement gives certainty to jobs. He denied claims it was not a secret plan "to take away rights from people or public services like healthcare and education".
"This is simply about ensuring we have a level playing field between the EU and Canada."
Meanwhile, business group Ibec said the Government "must rapidly address necessary amendments to enable ratification of CETA".
Pat Ivory, Director of EU and International Affairs, Ibec, said: "The purpose of CETA is to help bind the economies of the EU and Canada even more closely together and create opportunities for companies on both sides of the Atlantic.
"To have the option of this kind of market diversification is critically important as our businesses respond to the ongoing challenges presented by the international economy which is in a place of significant challenge due to high rates of inflation, rising interest rates, accelerated monetary tightening and volatile energy markets.
"At a challenging juncture for the global economy enhanced trading links between Canada and the EU represents a strategic opportunity to secure lasting benefits on both sides of the Atlantic.
"It is crucial that the Government act so that it does not waste this opportunity."
The Irish Congress of Trade Unions said it welcomed today's Supreme Court ruling.
"ICTU supports trade agreements between the EU and other countries that are fair and that create better jobs, that protect fundamental rights, including workers’ rights, and public services and that promote climate action, not one that privileges investors over democracy," ICTU General Secretary Owen Reidy said.
"It is now incumbent on Government to consider the Supreme Court’s ruling in full and with all stakeholders before deciding its response," he added.
Additional reporting: Reuters, Brian O'Donovan