The Tánaiste has predicted up to 4,000 Covid-19 cases per day in the next few weeks.
It comes as a further 1,378 cases of the virus was confirmed by the National Public Health Emergency Team (Nphet) on Wednesday.
Leo Varadkar said Ireland is well into its fourth wave due to the spread of the Delta variant but he is optimistic the health service will not be overburdened by any surge of infection.
"I think without a doubt, we're now well into a fourth wave, well into a Delta wave of infections," he said.
"Nobody knows for sure how that's going turn out, how long the wave will last, where the peak will be.
"I'm taking the optimistic view that we'll follow a similar course to Scotland, maybe peak around 3,000 or 4,000 cases in the next few weeks, then fall back and not see hospitalizations rise much above 500, ICU around 50. But we can't know that for sure.
"That's why I think we need to be quite cautious in the next couple of weeks and while restrictions will be loosened in relation to indoor dining on Monday, I don't anticipate there being very much eased beyond that for the next few weeks at least until we have a better idea as to where we stand."
Earlier today the President signed the legislation that will pave the way for the reopening of indoor hospitality.
Michael D Higgins signed the Health (Amendment) (No.2) Bill 2021, meaning that people who are fully vaccinated or have recovered from Covid-19 in the last six months can dine indoors.
Cabinet also agreed that indoor dining can resume on Monday.
Mr Varadkar added that the Government is seeking new data on hospitalisations.
"We decided as a cabinet to seek data from the HSE, better data on the number of people who are actually in hospital being treated for Covid," he said.
"It's essential that we need to find out with better data who's actually in hospital because they're being treated for Covid-19 as opposed to who's Covid positive, which is not quite the same thing."
Meanwhile, Deputy Chief Medical Officer Dr Ronan Glynn confirmed that 65% of the adult population has now been fully vaccinated.
Some 75% have at least one dose while any over the age of 18 in now eligible to register for the jab.
"We know that Covid-19 vaccines are extraordinarily effective at reducing each person’s individual risk of hospitalisation or severe disease. The Delta variant does not change this," said Dr Glynn.
"However, this variant is much more transmissible than what we have been dealing with previously and, as such, the challenge remains to protect as many people through vaccination as quickly as possible, across all age groups."
Mr Glynn said that vaccines, alongside the core public health advice "remain our pathway out of this pandemic."
He added: "Please avail of the opportunity to get protected through vaccination when it is offered to you".
“The basic measures remain as important and effective now as at any point in the pandemic and remember no one measure is sufficient by itself.
"When you meet people, keep your distance and meet outside, avoid crowds, avoid poorly ventilated indoor space, use your judgement, risk assess and leave if you don’t feel safe, wash your hands and wear a mask, isolate and get a test if you have any symptoms – do not go to work or socialise.”
Earlier today, Ministers discussed the new guidelines that will be central to the reopening of indoor hospitality.
The new guidelines will see an end to time limits for eating inside bars and restaurants.
A digital Covid certificate checker is being developed by the Government for businesses and customers in order to check valid certificates.
While it is expected that set time limits for dining will be removed from the guidelines on the basis of public health advice, an 11.30pm closing time will remain but will be reviewed.
Adrian Cummins, from the Restaurants Association of Ireland, said the body welcomed the decision to reopen on Monday July 26.
“This day will be a ‘day of hope’ for 20,000 hospitality businesses including restaurants, pubs and cafes across the state, and give 180,000 workers the opportunity to return to work,” Mr Cummins said.
“We are now calling on Government to immediately publish the reopening guidelines in order to advise businesses, employees and customers what will be required to reopen safely and securely.”
The Licensed Vintners Association (LVA) welcomed the return of indoor dining but said that businesses "urgently need" the updated public health guidelines to be published to finalise their preparations to open next Monday.
"We know everyone in hospitality will still have a lot of questions as to what they will be required to do to facilitate indoor service," said Donall O’Keeffe, Chief Executive of the LVA.
"Many of those won’t be clarified until the guidelines are formally published by the Government and Fáilte Ireland."
Mr O'Keeffe added: "We remain concerned flashpoints may occur at the entry to indoor hospitality. We hope this will be carefully monitored and should any trouble arise the authorities will be available to assist the hospitality business in question.
"We are also calling on all hospitality businesses and members of the public to ensure they carefully follow the new system. This is the only means that indoor hospitality will be permitted so it is up to everyone involved to do everything they can to make it work."