The €3bn Dart Underground project through Dublin city has been shelved, with new, cheaper plans to be drawn up.
Transport Minister Paschal Donohoe confirmed the expected u-turn, insisting the new design would cost less but run along a similar route from Inchicore to the Docklands.
He said the current design of the tunnel will not meet Dublin's needs, so it needs redesigning, even though the taxpayer has already spent €40m preparing it.
The tunnel design – originally envisaged as a twin 7.5km (four miles) route about 25m below the city streets – will be redrawn.
It now will be 2020 before any work begins on that aspect of the flagship urban transport project.
“As government works to further stabilise the public finances, we must continue to seek the best value for taxpayers’ money in everything we do,” he said.
“A project of such magnitude – in the order of €4bn – has to be designed and delivered in a way that best ensures cost-effectiveness for the taxpayer and the state.”
The original Dart Underground route would have gone from Inchicore to Spencer Dock through Heuston, Christchurch, St Stephen’s Green and Pearse station.
The intention was to create railway links between the national networks with people from Northern Ireland, Drogheda and Dundalk able to travel to out west of the capital to Kildare or Maynooth, and Dart commuters also able to switch to other lines in the city centre, mainly Pearse.
Mr Donohoe said transport spending on rail will now focus on expanding current Dart services including electrification of the northern commuter line to Balbriggan and additional work to increase frequency of services.
Any compulsory purchase orders secured for the original Dart Underground line will not be enforced now.
The Department of Transport said other aspects of the overall Dart expansion plan will proceed when funds are available including electrification of the northern line to Drogheda, the Cork Line from Heuston to Hazelhatch and the completion of four tracks from Park West to Inchicore.
Other improvements include electrification of the Sligo Line from Connolly to Maynooth and the removal of level crossings and re-signalling.