The payment was revealed in the 2005 annual report for Irish Life & Permanent, which owns the bank.
Mr McConnell left Permanent TSB at the end of last June to make way for Denis Casey.
A spokesman for Irish Life & Permanent said the payment was made to Mr McConnell as he stood down ahead of his retirement date.
Mr McConnell was due to retire this year but stood down as part of a wider reshuffle of senior roles.
Including the payment to Mr McConnell, Irish Life & Permanent’s executive directors shared €4.5 million in pay and bonuses last year, up from €3.9m in 2004.
Group chief executive of Irish Life & Permanent David Went picked up an 11% rise in his remuneration to €1.13m.
Mr Went’s package included a basic salary of €725,000 (up €45,000) and a bonus of €360,000.
The remainder of his pay consisted of benefit-in-kind and other fees. The company also made a €200,000 payment to Mr Went’s pension fund.
Mr Casey’s pay went up by €90,000 to €607,000. This was made up of a salary of €322,000, bonus of €240,000 and other payments of €45,000.
IL&P’s finance director Peter Fitzpatrick was paid a total of €789,000 last year. Mr Fitzpatrick’s pay was €94,000 higher than in 2004, mainly as a result of the rise in his annual performance bonus from €240,000 to €316,000.
The head of Irish Life Retail Kevin Murphy pocketed €553,000 for the year. His pay was €50,000 more than the previous year.
Gillian Bowler picked up fees of €240,000 for her part-time role as chairman, an increase of €85,000.
The other non-executive directors picked up fees of between €63,000 and €94,000.
Profit at Irish Life & Permanent rose by €67m to €531m last year.