Ireland has become the first country to fully divest public money from fossil fuels, which is viewed as the biggest contributor to climate change.
The Fossil Fuel Divestment Bill passed in the Dáil this afternoon.
The Bill, proposed by the Independent TD Thomas Pringle, prohibits the Government's Strategic Investment Fund from investing in fossil fuels.
It must now pass through the Seanad.
Following cross party support for the bill in the Dáil, the Ceann Comhairle Sean O'Fearghaíl commended Mr Pringle for his work.
Mr O'Fearghaíl said: "You've had a lot of praise deservedly heaped upon you", he said "to the point that I think it's only deceased members that we normally hear such praise for, but well done".
Praised is "heaped" on @ThomasPringleTD after Fossil Fuel Divestment bill passes through Dáil, making Ireland the first country to fully divest public money from fossil fuels. Bill now goes to Seanad pic.twitter.com/1RbBcI9uuc— Ailbhe Conneely (@AilbheConneely) 12 July 2018
Minister of State at the Department of Finance Michael D'Arcy also commended Mr Pringle and welcomed the passage of the bill.
In a statement he said: "The real effects of the Bill will be felt if other countries follow Ireland's lead in sufficient numbers - this will help drive demand for low-fossil-fuel investments at a global level and potentially stimulate investment in renewable and sustainable alternatives."
The decision has been welcomed by NGOs such as Trócaire.
Éamonn Meehan, Executive Director of Trócaire said: "Today the Oireachtas has made a powerful statement. It has responded to the public’s call for leadership on this issue and sent a powerful signal to the international community about the need to speed up the phase-out of fossil fuels if global climate goals are to be delivered.
"This is vital. Climate change is one of the leading drivers of poverty and hunger in the developing world and we see its devastating impact every day in the communities in which we work."
He cited the way Ireland has been labelled a 'climate laggard' in recent years and said the passing of the Donegal TD's bill marks a change of pace on the issue.