The Cabinet has given the green light for the preparation of policy proposals which will lead to high level structural changes in the Defence Forces, including the creation of a post of the Chief of Defence.
Tánaiste and Minister for Defence Micheál Martin said the proposals will lead to a "radical transformation" of the high level command structure within the Defence Forces.
He added: "It will mean substantial legislative change and new legislation to underpin our Defence Forces into the future. I think that this is significant in the overall context both in terms of capability of our Defence Forces and also in terms of the culture change within our Defence Forces."
The proposals will include recommendations contained in the Report of the Commission of the Defence Forces, which was published in February of last year, to provide effective assurance and accountability.
It is likely to lead to the creation of three Service Chiefs, and Deputy Service Chiefs, for the land, air and maritime forces, which is also set out in the report’s recommendations.
Meanwhile, the Cabinet also approved a request from Mr Martin for the renewal of the Defence Forces participation in the UN peacekeeping operation in Lebanon for a further 12 months.
The United Nations Interim Force in Lebanon, or UNIFIL, is Ireland's biggest overseas deployment, with 340 personnel currently serving in the south of the country.
The 121st Infantry Battalion will finish its deployment at the end of this month, a six-month tour of duty marked by the death of Private Seán Rooney, whose vehicle came under attack in the coastal Lebanese village of Al-Aqbiya last December.
Lebanese authorities are continuing their investigation into the incident, which also led to Pt Rooney's colleague, Trooper Shane Kearney, sustaining head injuries.
Earlier this month, the Tánaiste carried out a ministerial review of the troops in the 122nd Infantry Battalion ahead of their deployment to Lebanon.