The State will pay rent to the Catholic Church for its schools that transfer to multi-denominational patrons under new 40-year leases.
The arrangement forms part of a Department of Education deal with Catholic bishops aimed at giving greater choice in primary education for families.
Catholic schools account for 89 per cent of primary schools, while about 5 per cent have a multi-denominational ethos.
Under the deal, the church would retain ownership of schools and receive “appropriate” rents which take into account the fact that schools may have benefitted from State capital investment in the past.
The insurance premium for school buildings also forms part of the leasing arrangement, as well as contributions to legal costs involved in securing any State interest in the property.
The department should, where possible, have the option of extending any leases or purchasing school properties if they are put up for sale in future.
The department said commercial rents are not appropriate due to the educational use of the properties and a “reasonable” rent should be agreed.
The Government has previously been criticised for its slow progress in providing access to multi-denominational education.
Only 20 or more formerly Catholic primary schools have been divested or reconfigured as multi-denominational schools since 2012.
The Programme for Government commits to improving parental choice by meeting a target of delivering 400 multi-denominational primary schools by 2030. Latest figures show there are 164 multi-denominational schools.
Under a new deal, Catholic bishops will "co-operate fully" with the department in seeking to facilitate a more diverse school patronage in eight pilot areas where there are no multi-denominational primary schools. The pilot areas are Arklow, Athlone, Cork, Dublin, Dundalk, Galway, Limerick and Youghal.
The department said it will make available “independent facilitators” to work with school patrons and school authorities at a local level.
They will help identify potential schools and engage with school staff and parents, with a view to agreeing on a transfer of patronage and change of ethos, where there is demand.
Minister for Education Norma Foley said the learning from these pilots will inform the process in other areas of the country.
“I acknowledge the significant contribution that the Catholic Church has made, and continues to make, to the Irish education system. The department and the church recognise that there is a need for further progress in terms of visible and tangible change to provide more options of multi-denominational provision for parents,” she said.
The patronage of many Catholic schools that reopen as multi-denominational is likely to transfer to State-owned Education and Training Boards.
It is the patron to Community National Schools, which are multi-denominational in ethos.
Earlier this week, Educate Together – another multi-denominational patron – said it was seeking reassurance from the department that parents will be consulted and provided with accurate information for the reconfiguration of future schools.
It said it had been excluded from the reconfiguration of a Catholic school in Nenagh, Co Tipperary, despite surveys indicating it was the patron of choice among parents.