The Cabinet has signed off on a plan which will see excise on petrol cut by 20c per litre and 15c per litre on diesel.
The cut to excise duty on petrol and diesel will remain in place until August 31.
The move will cost €320 million and aims to ease the impact of sky-rocketing fuel prices sparked by the Russian invasion of Ukraine.
The Government expects the new measures will mean a 60 litre tank of petrol will cost €12 less and a 60 litre tank of diesel will cost €9 less. Meanwhile, marked gas oil will fall by 2c per litre.
Minister for Finance Paschal Donohoe will later on today bring the financial motion to the Dáil, which will have to be passed by midnight after a vote from TDs.
Sinn Féin had called for measures that would result in a 25 cent cut per litre of diesel and petrol.
The party also wants any cuts capped at €1.75 per litre to ensure the reductions are not quickly eroded.
Amid warnings to the Government about the economic impact of war in Ukraine on this country, senior figures in the coalition have insisted there is no prospect of short-term rationing of gas and electricity.
However, they said that all energy resources are now very precious and planning for “scary” scenarios has to take place.
The cost of petrol and diesel has risen sharply in recent months but has sky-rocketed significantly since the Russian invasion of Ukraine.
A number of filling stations pushed prices at the pumps over €2 a litre over the weekend.
Households are already struggling to deal with the cost-of-living crisis that has seen inflation at a 20-year high.
The cost of petrol alone at the pumps has gone up by 70 cent a litre since January of last year, the Dáil heard yesterday.
Taoiseach Micheál Martin warned that the war in Ukraine was going to increase further the cost of fuels. The State currently maintains a 90-day reserve of crude and refined oil product.
The Government was told the impact of sanctions had created volatility on energy prices across the globe.
Fuels for Ireland said the Government is recognising that it must use excise duty to reduce the cost of fuel to consumers. CEO Kevin McPartland said the figure announced today needs to be under regular review.
He said if prices increase further the Government has to make sure that Irish businesses are insulated from the impact.
Fuels for Ireland welcomed the move by the Government to cut excise duty, but cautioned that ”it is only going to get us back to where we were two or three days ago.”
Mr McPartland said diesel on the wholesale market went up by 22 cent yesterday
He added the reduction is not ”going to have a dramatic impact straight away.”