The multi-millionaire is seeking to demolish an existing house on Rossmore Island, near Rossdohan on the Ring of Kerry, and replace it with a new one.
Flatley is though to have purchased the 56-acre island for over €1 million.
If he gets permission to build, the Chicago-born star, who turned 50 earlier this week, will have some pretty rich neighbours.
The Smurfit family have had a holiday home near Rossdohan for several decades, while luxury car importers the O’Flaherty family own the spectacular Reen na Furreira estate.
Meanwhile, another well -heeled neighbour, west of Ireland developer Bernard McNamara, has redeveloped the former Parkansilla GSH hotel and grounds.
Lord of the Dance star Flatley, who made his name with Riverdance in the 1994 Eurovision Song Contest, already owns the magnificent Castlehyde House near Fermoy, Co Cork.
He spent millions refurbishing the Georgian mansion, which was once home of Ireland’s first president Douglas Hyde and overlooks the River Blackwater.
It’s expected that Flatley will use the Kerry hideaway as a holiday home, which he’ll be able to enjoy with his wife Niamh O’Brien and their young son.
The couple met when she performed in Flatley’s Feet of Flames shows.
They have one son, Michael St James, who was born on April 26, 2007.
Flatley already has a number of homes in Barbados, Chicago, France and London.