Intel Ireland is to restart construction on its $2.2 billion Fab 24 facility at its Leixlip, Co Kildare plant.
The facility represents one of the State's biggest technology investments and will create over 1,000 jobs.
An additional 1500 workers will be employed in its construction.
The announcement will be seen as further evidence of the company’s commitment to stay in Ireland and as a safeguard to the jobs of some 3,150 hi-tech workers already employed at the Kildare plant.
The Tánaiste and Minister for Enterprise, Trade and Employment, Ms Mary Harney heralded the news as one of the most important foreign investment decisions of the past decade.
Ms Harney said: "It was the single biggest indicator yet of the revival of the Irish technology industry."
IDA chief executive Mr Sean Dorgan said the announcement is a clear vote of confidence by a global leader in the future of the IT industry, and of Ireland.
Mr Dorgan said: "Even though there is still some weakness in IT demand globally, Intel is investing in it own future here in Leixlip, and we greatly welcome that."
Intel had halted construction of the proposed plant in 2000 due to the downturn in the high-tech sector and a slump in demand for its chips. The firm had delayed a restart to construction twice already and recently said it would negotiate with builders to try to reduce the cost of construction for Fab 24.
