It comes as British Prime Minister Theresa May accused internet giants of allowing terrorist ideologies “safe space to breed” and called for new international agreements to regulate the area.
The draft directive, adopted by the European Commission, still has to be agreed by the European Parliament before it becomes law.
Under the directive, online video services, such as Google (which owns YouTube), Facebook and Twitter will be legally obliged to take action against videos inciting violence and hate speech as well as content harmful to children.
Google, Facebook and Twitter all have their European headquarters in Ireland.
The European Commission agreed far more extensive measures the day after the Manchester suicide bombing on 22 May in which 22 people, including children, were killed.
In a statement at the weekend to the Irish Examiner, the Department of Communications said the new proposals were adopted despite the opposition of eight member states, including Ireland.
The department said that initial proposals included bringing services such as YouTube into the scope of the Audiovisual Media Services Directive in a “targeted and limited” fashion.
The department said: “Under this proposal, such services are obligated to put in place, by co-regulation, measures such as parental controls and user-flagging mechanisms, to protect minors from harmful content and all audiences from hate speech.”
It said member states would have certain obligations with regard to monitoring of measures by video-sharing platform services (VSPS).
The department said these proposals, which Ireland “could support”, were discussed at a working group and a general approach text was declared at a May 23 meeting.
“In that text, certain provisions have been substantially altered from the Commission's proposals,” said the statement. “As an example, the definition of a VSPS has gone from being clear and targeted to being unclear and broad.”
It said: “It is our view that the current text risks legal, administrative and regulatory uncertainty and will potentially stifle innovation.”
The statement said Ireland, represented by Minister Heather Humphreys along with seven other member states “indicated that they could not support the text” as drafted.
“Despite our opposition, the general approach was declared adopted,” the statement said.
It said detailed consideration on implementing the directive at a national level will take place once a final text is agreed and said the commission hoped the process would be completed by “end of this year”.
Meanwhile, Imam Ibrahim Noonan of Ahmadiyya Muslims of Ireland said Ms May's pledges to combat extremism should be copied here.
He said: “My advice to the British government and Irish government is to take a good look at the background of all the Imams and see who are linked to, who is funding their mosques, which countries do they come from and visit, who are the Sheikhs they are linked to within their countries and what are their views.
“If they find that are linked with extremist organisations throw them out of the UK and Ireland.”