The Cabinet has signed off on a €24 million redress scheme for the Stardust families.
The redress scheme, which has been agreed with the families, follows the Stardust inquest verdict in April.
The jury found the fire started in the hot press in the main bar of the nightclub in Artane and was caused by an electrical fault.
That finding is in stark contrast to the original 1982 Keane Tribunal finding that the fire was "probably caused deliberately". That conclusion, which was long contested by families of the victims, was struck from the record in 2009.
A memo outlining the plan was raised by Taoiseach Simon Harris and Minister for Justice Helen McEntee during the Cabinet meeting.
Speaking after the announcement, Mr Harris said "no sum of money can replace the loss of a loved one".
"The State understands very clearly and I understand extraordinarily clearly having met with the families, that you can never put any price or any amount on the loss of a life," he said.
"When I met the Stardust families for the first time, they said to me 'before you deliver the State apology, please read the pen portraits'.
"I absolutely know, as do the families, that there is no sum of money that in any manner or means replaces the loss of a loved one. Absolutely not," Mr Harris added.
Stardust survivor and campaigner Antoinette Keegan said: "You can't put a price on a life. We were never in this for money, all we ever wanted was truth and justice."
The redress scheme comes after a State apology delivered by Taoiseach Simon Harris on 23 April, individual letters of apology to the families, and a commemoration ceremony at the Garden of Remembrance on 23 June.
The families' solicitor, Darragh Mackin from Phoenix Law, said the development is the "crystallisation of the intense and relentless engagement" with the Government.
In a statement, Mr Mackin said: "The unprecedented sum paid to the families is reflective of the unprecedented miscarriage of justice bestowed on these families.
"It is impossible to put a value on the loss these families have sustained.
"However, these payments go a considerable way to providing support to these families for all their relentless efforts and life investment, which they so courageously devoted over the last four decades."
Prior to the State apology, Taoiseach Simon Harris "apologised unreservedly" to the survivors and families of the victims of the Stardust disaster during a "humbling and emotional" meeting.
That morning, the families walked with a banner remembering their relatives towards Government buildings.
They were greeted by the Taoiseach who spoke to them in the courtyard and shook their hands before going into the official meeting.
