New cheaper lending to small and medium enterprises will begin to be available before the end of the year.
It follows the formal signing of the Government's new Strategic Banking Corporation of Ireland which is backed by funding from Germany and the European Investment Bank.
It will not lend directly to businesses, but will make cheaper credit available through the main banks.
Public Expenditure Minister Brendan Howlin has said this action is delivering on a commitment to improve credit for small and medium businesses.
“We see it as an important tool to provide bespoke funding for the SME sector,” said Howlin.
“It will be focused on the needs of the SMEs and as opposed to the needs of the lender.”