Allied Irish Banks has confirmed it has signed up to join the Government's guarantee plan, becoming the first bank to submit formal "acceptance deeds" on the scheme.
The plan initially guaranteed €400 billion in liabilities of six Irish-owned institutions, but the European Commission later approved a revised €485 billion scheme that includes five foreign-owned banks with significant Irish operations.
Minister for Finance Brian Lenihan has said that the banks, will have to pay an estimated €500 million a year to avail of the €485 billion guarantee.
AIB will pay less than €130 million a year to participate, while Bank of Ireland will pay in the region of €115 million a year under the two-year guarantee. Irish Life Permanent will pay less than €50 million a year, while EBS building society will pay less than €15 million a year.
It is not clear how much the scheme will cost Anglo Irish Bank or Irish Nationwide Building Society.
"Allied Irish Banks (AIB) announces that AIB and its subsidiaries, AIB Group UK, AIB Mortgage Bank, AIB Bank CI Ltd and Allied Irish Banks North America Inc, have today executed guarantee acceptance deeds," AIB said in a statement.
The Government has demanded stricter dividend-payout and credit-control arrangements as well as curbs on executive pay among the conditions for banks committing to the scheme, which requires them to sign a formal contract.
Last week, the Financial Regulator said it was examining the loan books of six Irish institutions expected to sign up to the guarantee plan.
The others are Anglo Irish Bank, Irish Nationwide Building Society and the Educational Building Society.
Foreign-owned banks that have sought cover under the scheme include Ulster Bank, which is part of Royal Bank of Scotland Group.