The Government has bought the former Carroll's cigarette factory for Dundalk Institute of Technology and other State authorities.
The £13 million purchase is part of a significant boost for education announced in the supplementary Estimates yesterday.
In all, the Minister for Education, Dr Woods, has secured an extra £193 million.
This includes an extra £13 million for primary school buildings.
Dr Woods said last night: "The supplementary Estimates are further evidence of our commitment to the sector.
They underpin an unprecedented level of funding for developing and improving current and capital provision and they allow for substantially increased allocations for pupils with special needs."
On the Dundalk initiative, he said: "The purchase of the P.J. Carroll's property in Dundalk represents one of the most significant investments in education ever for the State."
The property, comprising the factory and 45 acres of land, will enable the institute to provide state-of-the-art accommodation for its 3,000 students.
Significantly, it will enable it to broaden its range of activities to meet local industrial requirements and to attract inward investment.
Dr Woods said a unique aspect of the arrangement entered into by the institute and P.J. Carroll was that the company would lease back part of the factory, which is not required by the institute, to facilitate their continuing operation in Dundalk.
A detailed breakdown of the Minister's supplementary Estimate is as follows:
first-level education, £53.3 million;
second-level and further education, £76.5 million;
third-level and further education, £63.233 million.
In other spending, an extra £12 million will enable the Minister to make early payment of capitation grants for primary and secondary schools in respect of the 2000/01 school year.
These payments would normally be made in January/February of next year.
Capitation grants, which total almost £42.3 million, will now be paid before Christmas to improve the cash flow of schools.
On special needs, an additional £2 million will be allocated by the Minister to meet the cost of more special needs assistants in primary schools.