The improved financial package for the Northern Ireland Executive was a "major boost to the entire island", Minister for Finance Brian Cowen said yesterday.
Commenting after discussions with British chancellor of the exchequer Gordon Brown, Mr Cowen said, "Today's announcement marks a real opportunity for economic progress to accompany political stability in Northern Ireland.
"This unprecedented investment has been made possible through the joint contribution of the Irish and British governments and will benefit everybody on this island.
"The agreement to develop a dual carriageway-standard road to Derry and Donegal removes the single greatest impediment to the future development of the northwest and the Border counties," Mr Cowen said.
Also welcoming the announcement, Minister for Foreign Affairs Dermot Ahern said, "To-day's package is a significant achievement for the parties as they prepare for restoration. It provides a good economic basis for the incoming executive to carry out its work for all the people of Northern Ireland."
There was "an unprecedented contribution from the Irish Government" with a view to promoting the "economic prosperity and development of the whole of the island of Ireland as well as all of the community in Northern Ireland".
Mr Ahern added: "I see real benefits for the entire Border region."