Thousands of hospital doctors are set to get pay increases.
Around 700 consultants had taken a legal case against the State and the HSE over a breach of contract, with the Government saying 2,000 other doctors could also had cases.
The action has now been settled.
According to the Government, the settlement will cost the State €182 million in back payments - as well as an ongoing cost of €62 million each year from next January.
However, it doesn’t apply to those recruited after 2012.
Paschal Donohoe and Simon Harris comment on the agreement at Government Buildings. Image: Paul Quinn
Speaking about the settlement, Finance Minister Pascal Donohoe said: "I recognise that these are very significant, large amounts of money.
"However, the outcome that we have achieved is considerably less than our earlier estimate of potential costs of almost €700 million."
The settlement was welcomed by the Irish Hospital Consultants Association.
In a statement, the association explained: "Today’s High Court settlement, is an important and essential development in order to ensure the delivery of high quality care to patients in the public health service.
"[It] is a first significant step in restoring trust between consultants and health sector employers. However, it is now essential that the discrimination against New Entrant Consultants is ended without delay."