Lidl is to become the first big employer here to commit to paying the "living wage" of €11.50 an hour from November 1.
The discount retailer - which has more than 140 stores in Ireland with almost 4,000 staff - said the move would affect 20% of its staff currently earning below this rate.
All other staff currently earn more than €11.50 an hour.
The living wage technical group devised the figure as the amount needed for an acceptable standard of living.
Minister for Employment and Business Ged Nash said Lidl's move was a significant milestone.
He said: "This is the first major retailer to commit to paying what's described as a living wage. It's a significant milestone."
Update 11am: Minister Nash said he expected other companies to follow Lidl's suit in bringing in the 'living wage'.
He said: "This will create a momentum behind the campaign and I would expect a significant number of other employers to start taking this initiative themselves."