Minister for Finance Brian Lenihan will bring legislation to allow burden-sharing by subordinated bondholders in Irish banks before the Dáil on Wednesday.
A spokesman for the Department of FInance said the measures will be included in the Credit Institutions (Stabilisation) Bill 2010, which is due to be voted on by 10pm that day.
Subordinated creditors rank behind senior bond holders and depositors in a liquidation.
The €85 million deal with the International Monetary Fund (IMF) and European Union explicitly bans the State from defaulting on guarantees given to the overseas finance institutions that loaned €15 billion in senior bonds to Anglo Irish Bank.
The memorandum of understanding detailing the terms states that the Government cannot fall into arrears on either its contracted or guaranteed external debts, meaning the debts of the banks that it has guaranteed.
Additional reporting: Bloomberg