Standardised testing of all seven and 11-year-olds in primary schools is expected to be introduced within two years.
The move will mean that parents, for the first time, receive a report card detailing how their child is progressing in relation to national averages.
It is understood the Minister for Education, Mary Hanafin, backed plans for the new system this week.
Sources say schools will be free to decide when tests will take place over the school year. There will be no set days for the tests and there will be no question of teaching for the exam.
Last night, Irish National Teachers' Organisation (INTO) general secretary John Carr said the union supported the development of an agreed national assessment policy for primary schools. But he linked progress on the issue to INTO's key demand for reduced class size.
Ireland is one of the few OECD states without standardised tests. At present, schools use a huge variety of different tests but there is no standard test.
Under the plans, pupils will be tested on literacy and numeracy in two phases. These are:
Phase 1: At the end of first class or the start of second class; and
Phase 2: At the end of fourth class and the start of fifth class.
Ms Hanafin told the advisory body on assessment this week: "I would be anxious that the report card should provide data on the pupil's attainment that is easily understood by both parents and teachers alike."
The report card will be given to parents on two occasions during their child's time in primary school.
The Minister asked her advisory group, the National Council for Curriculum and Assessment (NCCA), to finalise proposals for the tests.
The NCCA has said the new tests can help to achieve a higher level of consistency in teachers' assessments across and within schools.
The plan is to introduce the new system in the 2007-2008 academic year. The Department of Education believes the new testing regime could help schools, teachers and parents identify possible learning difficulties at an earlier stage.
Mr Carr said a new testing system was nothing but "a labelling exercise" without a sustained effort to reduce class size in the State, the second-highest in the EU.
In her letter, Ms Hanafin writes: "I believe that standardised testing on a systematic basis has great potential to enhance the quality of teaching and learning for our students at classroom level, and to provide valuable information for parents about their children's learning. It is also clear that test results . . . can also guide policies aimed at improving performance and combating educational disadvantage."
Ms Hanafin and INTO are anxious information gathered in the tests should not be made available widely - in case they lead to the compilation of school league tables.
