The IRA should decommission totally and verifiably and transform itself into a "commemorative organisation", Mr Albert Reynolds said yesterday.
The Provisionals, as well as the British army, should demilitarise, thus facilitating normal politics in Northern Ireland, he told a conference of young people in Belfast.
Referring to the leader of the DUP, Mr Reynolds said he was sure the Rev Ian Paisley could be the man to lead the politics of change which would allow local politicians to concentrate on social and economic development.
The former taoiseach was addressing a conference at the Odyssey centre to mark the 10th anniversary of the Washington-Ireland Programme.
The cross-Border, cross-community initiative provides leadership development training and professional internships in Washington for university students from north and south.
Mr Reynolds urged all parties to the talks at Leeds Castle in Kent to seize the "unique opportunity" before them.
He argued that direct rule, imposed in October 2002 following suspension by the British government of the Stormont institutions, had not met Northern Ireland's needs and should be replaced by a power-sharing executive headed by the DUP leader. "He is the man to lead change," he argued.
But, he said, an end to the IRA's paramilitarism was essential.
"I believe that total and full decommissioning must be carried out, leaving no-one in any doubt about its totality and veracity."
He added: "The Provisional IRA must reduce themselves to a commemorative organisation only; demilitarisation must take place by all involved, including the British army, and thereby return normality to society."
In a direct appeal to the DUP and Sinn Féin who emerged as the dominant parties in last November's Assembly elections, Mr Reynolds said power-sharing was "the only successful and equitable way forward for all parties - and especially the two largest ones, DUP and Sinn Féin".
He hoped full powers, including policing and justice, could be devolved to Stormont thus allowing locally elected Assembly members "full management" of the North's affairs.
This would pave the way for Sinn Féin to take its seats on the policing board, the 19-member body which runs the PSNI and which it currently boycotts.
"When all these actions are completed, and all other smaller issues that will arise along the way are complete, then everybody can redirect their energies towards economic and social development," he argued.
The former head of the North's civil service, Sir Kenneth Bloomfield, told the conference the British government was wrong to place a cap on student places at third level. He said the numbers of students seeking to study in Northern Ireland could fill a university by themselves.
The North should follow the example set by the Republic in terms of provision and attitudes towards continuing education which would transform economic and social prospects.
Teaching should continue, not until a set point, but throughout life, he argued.