Dublin is to get a second civil airport to provide increased air traffic capacity and to raise money for the Defence Forces.
The Minister for Defence, Mr Smith, will propose that a large proportion of the State lands at Baldonnel military aerodrome should be sold to fund the modernisation of the Defence Forces.
The Government will decide next month whether the airport should cater for light aircraft or for large-scale commercial traffic. The Air Corps would retain a military presence at the airport south west of Dublin, close to the M50 motorway.
Mr Tony Ryan, Ryanair's founder, has urged the transformation of Baldonnel into a commercial airport and already private developers have submitted a number of projects to the Government.
When Mr Smith brings his proposals to Cabinet, they will probably be considered within the context of proposals by the Minister for Public Enterprise, Ms O'Rourke, for the shake-up and part-privatisation of Aer Rianta.
The Progressive Democrats have advocated the sale of Shannon Airport to the private sector, as a first stage in the privatisation of Aer Rianta, but the Tanaiste, Ms Harney has said she does not favour a public monopoly, such as Aer Rianta, being simply transformed into a private monopoly.
Because of this approach - and the need to ensure competition in the sector - the Government may look again at its earlier decision not to favour a large-scale commercial airport at Baldonnel.
Yesterday Mr Smith said his preferred option would be an independent commercial enterprise - run separately from the Air Corps - at Baldonnel. As in many other European countries, the Air Corps would have its own section at the airport and share some facilities, such as runways, with commercial users.
Any deal with developers in the private sector could be on a direct sale or a lease-back basis.
The scale of the development - and the financial return to the Department of Defence - would depend on the type of commercial enterprise involved.
It could be a private enterprise development for small aircraft, or a large-scale venture such as suggested by Ryanair. These would be matters for the Cabinet to decide, he said.
The Department of Defence has already raised £30 million from the sale of Army barracks, and it plans to raise another £100 million through the sale of land at Baldonnel, firing ranges and other properties.
The Minister said this cash injection would allow the Defence Forces to implement their modernisation plans within five years, rather than within the initial projection of two decades.