KBC was one of a number of lenders forced to divest assets, close branches, reduce market share and temporarily stop paying dividends as part of a European Commission review of a raft of bank bailouts across the 27 European Union member states.
The Irish branch, KBC Bank Ireland, confirmed today it had not been earmarked for divestment.
"The stability which the plan affords our business in Ireland is very welcome," said KBC Bank Ireland chief executive John Reynolds.
"We will continue to play our part as a bank in assisting our customers as they weather current financial pressures and support Irish businesses building for the future."
The EU executive also approved restructuring plans for British lender Lloyds Banking Group and Dutch bancassurer ING.
Both Lloyds and ING had weeks earlier announced their split-ups to appease EU competition concerns.
"This plan effectively addresses the Commission's competition concerns and at the same time ensures the return of Lloyds Banking Group to long term viability," European Competition Commissioner Neelie Kroes said in a statement.
She said the restructuring of the three banks would return them to long-term viability and secure a level playing field.
The Commission said there was a sufficient degree of market interest in the assets to be sold by the banks.
EU governments injected hundreds of billions of euro into their financial institutions in the wake of the financial crisis.
(Additional reporting: Reuters)