The government's three "super-junior" ministers will "waive and gift back" their €16,000 pay rise.
It follows sustained criticism from opposition politicians and the public.
The three junior ministers who sit at Cabinet - Jack Chambers, Hildegarde Naughton and Pippa Hackett - have "decided to waive and gift back to the state the increased allocation", according to a statement. It is "in addition to the 10% pay cut" agreed for ministers earlier this week.
Instead, the three ministers of state will share €32,000 worth of allowances between them, taking home about €10,500 each.
The salary bump and extra allowances were awarded after a vote in the Dáil last week. The government said the increase was necessary due to a need to have pay equity among ministers.
Mr Chambers and Ms Naughton are estimated to have salaries of around €132,000 and Ms Hackett will earn roughly €106,500.
Despite Monday's announcement that cabinet would gift 10% of their salary back to the State, the coalition ministers will still take home more pay than the previous government. For the super junior ministers, the pay cut was due to apply to their increased salaries but will now apply to their previous wage.
The u-turn is another embarrassing climbdown for the government which has been widely criticised for misreading the mood of the public in recent weeks.
The 10% cut was seen as "damage control" in order to gain back some ground with an angry public. The government claimed the decision had been made "weeks ago" but had not been announced.
The Taoiseach admitted the matter "could have been handled better collectively by the Government" amid ongoing reports of government TDs outraged by the move.
The Dáil also heard there was no Cabinet decision to award a State car with two Garda drivers costing €200,000 a year to the Minister for Foreign Affairs Simon Coveney.
In 2011, the then-government made a decision to abolish State cars with Garda drivers for all but three members of the Government; the Taoiseach, Tánaiste and Minister for Justice. Mr Coveney will retain his state car, for "security reasons", according to the Taoiseach.
Labour leader Alan Kelly noted that the cost to An Garda Síochána will be €1 million for the lifetime of government and queried if the force will be reimbursed for the cost.