The Western Development Commission says a further 1,300 Civil Service jobs could be relocated to towns in the western region on top of the transfers announced in the Budget.
Some 20 small and medium-sized towns with a population of more than 1,500 have been identified by the commission in a report due to be published today.
The report also names Knock International Airport as a suitable location. The Government has already proposed that the Department of Community, Rural and Gaeltacht Affairs be transferred there.
The report was drawn up at the request of the Minister for Community, Rural and Gaeltacht Affairs, Mr Ó Cuív.
The towns examined include Ballinasloe, Tuam, Loughrea, Athenry, Gort and Oranmore in Co Galway; Westport, Claremorris (which is due to get 140 Office of Public Works jobs) and Ballinrobe in Co Mayo; Buncrana, Ballybofey-Stranorlar, Ballyshannon, Donegal town, Bundoran and Carndonagh in Co Donegal; Roscommon town, Boyle and Castlerea in Co Roscommon; Kilrush, Co Clare; and Carrick-on-Shannon, Co Leitrim. Ten of these towns have road and rail links, and 10 have road links only.
The report says that while inward investment can contribute to local economies, there is a "quality of life" return, with cheaper housing, easier commuting and lower childcare costs.
It says that whereas past decentralisation of government departments has typically involved certain sections, advances in information and communications technology and good access to Dublin may allow for relocation of entire departments.
The report says that development of air and rail links - such as the western rail corridor - will be important drivers of growth in the region.
Other factors affecting the competitive positioning of towns will include availability and cost of broadband, energy (both electric and gas) and waste and water infrastructure.
"Access to improved infrastructure remains a key challenge in the western region," said Ms Lisa McAllister, chief executive of the Western Development Commission . "The WDC will continue to make recommendations for solutions to these challenges."
The commission was established as a statutory agency to foster and promote economic and social development in the seven counties of Clare, Donegal, Galway, Leitrim, Mayo, Roscommon and Sligo.