The Government and the Omagh Bombing Inquiry have agreed a mechanism which will allow the inquiry team to access information held by the State about the 1998 atrocity.
The Memorandum of Understanding sets out the arrangements for the provision of information and material.
A central point of contact will be established in the Department of Justice to handle all requests for information.
There will be further discussions about additional co-operation with the inquiry, including whether witnesses from the Republic of Ireland will be available to give evidence.
The families of the victims of the 1998 attack in the Co Tyrone town had called for full disclosure from the Government of relevant intelligence it holds on the 1998 bombing.
Twenty-nine people were murdered, including a woman pregnant with twins, as dissident republicans tried to wreck the emerging peace process following the signing of the Good Friday Agreement.
A promise to co-operate with the Omagh Inquiry was a Programme for Government commitment.
Minister for Justice Jim O'Callaghan said the first part of the process had been to agree a mechanism for the handing over of the documents.
If requests for witnesses from the Republic to give evidence followed, that would be looked at and legislation would be tabled to facilitate it.
"That's something that would also require a memorandum of understanding. I've also indicated to Government that it would probably require legislation in the Oireachtas and I and the Government are committing to introducing that legislation if required.
"Obviously in the first instance the inquiry wants to procure the documents.
"It's only when they see the documents that I suppose they'll be in a position to identify what witnesses they wish to call.
"But certainly I'm hoping to bring forward legislation, certainly in the summer months or early in the autumn and we certainly would be co-operating with the inquiry in respect of its request for facilitating witnesses to give evidence," he said.
Mr O'Callaghan said there was already a piece of legislation enacted in 2019 for the purpose of allowing witnesses to give evidence to courts outside the jurisdiction and he believed that was a model that could be followed or could apply if it were properly amended.
He said the Government was determined to honour the families' wishes for full disclosure on the events of that terrible day.
Northern Ireland Secretary Hilary Benn said he welcomes the Irish Government's commitment to co-operate with the inquiry and called it a "very positive step".
Secretary to the Inquiry Sam Hartley said the agreement was a "significant step forward in allowing the inquiry access to material, information and assistance from the Government and agencies in Ireland".
In a statement, solicitor John Fox, who represents 14 of the Omagh families, said: "The families need time to consider what is a complex but very important agreement now reached between the Irish Government and the Omagh Bombing Inquiry Chairperson.
"The Irish Government has committed to fully cooperating, and this is the first document which has been made available to signify that commitment.
"In considering the document the families will be very much focusing on ensuring that the providing of materials is done in a manner which is transparent, open to scrutiny and sufficiently independent.
"They emphasise that the determination of the relevancy of materials must be made by the independent inquiry, free from any government interference or overriding objections.
"It is intended to engage with the Irish Government to discuss the outworkings of the agreement and to consider any matters which it does not deal with."
Michael Gallagher, whose son Aiden was murdered in the bombing and who represents some of the families, said he was disappointed relatives of the dead had not been included in discussions around the agreement.
"I think it's tragic that the Government didn't engage with families, that would have been a hugely important part of this process," he said.
"We have had no input whatsoever into this document."
He said that he had been seeking a meeting with the Government around the practical outworkings of the agreement, including whether witnesses from the Republic of Ireland could be called and whether they would give evidence in person before the inquiry or give statements in the republic.
The Omagh Inquiry was set up to establish whether intelligence failings by the UK authorities meant the atrocity could have been prevented.
Its terms of reference limit its powers to the UK state and state bodies.
But the families have said the truth about Omagh would never be fully revealed without comprehensive co-operation from the Irish State.
The bombers came from there, the bomb car was stolen there, the device was made and loaded there and the killers returned there after carrying out the attack.
The memorandum says that Minster O'Callaghan will co-operate "to that extent that is permissible under laws applicable in Ireland" to establish a mechanism of engagement with the inquiry; to fully assist it; to ensure that any co-operation is lawful and effective.
Any requests for information must be made in writing and the decision on whether to accede to the request is for the Irish authorities alone.
The written request must include details on what is being sought, an explanation for why, information on how the information will be used or held by the Inquiry and include a deadline for a reply.
Prior to disclosure, all materials will be assessed for redaction by the minister or other state agency including to meet requirements under Irish law, the constitution, EU law and the European Convention of Human Rights.
Members of the inquiry team will also be afforded the opportunity to travel to the Republic to view unredacted versions of the documents - except in exceptional circumstances.
The information provided can not be further disclosed to any third party without the agreement of the Government.
At the conclusion of the inquiry the material will be returned or destroyed.
Agreement 'falling short of what is required' - DUP
DUP leader Gavin Robinson criticised the agreement and said it is "falling short of what is required".
"This arrangement is a contortion of state control masquerading as co-operation," he said.
"It provides no statutory powers, no ability to compel witnesses and no guarantee of full disclosure. The painful truth remains, a terrorist atrocity that was planned and executed from the Republic of Ireland still lacks the scrutiny, the courts demanded.
"The families affected by the Omagh bombing have waited nearly three decades for answers.
"Their courage, dignity, and persistence deserve more than token gestures or legal frameworks that stop at the border.
He said the Irish Government's continued "refusal to establish its own parallel inquiry undermines the search for truth and leaves a significant blind spot in the pursuit of justice".
"I stand with the families in calling for a full and independent inquiry in the Republic of Ireland," Mr Robinson said.
"Anything less is an abdication of responsibility and a disservice to the memory of those who were murdered on that tragic day in 1998.
"The path to justice must not be shaped by political convenience or constrained by jurisdictional limits. It must be complete and worthy of the lives that were lost," he added.
