Labour's ruling body has voted overwhelmingly to press ahead with merger talks with Democratic Left.
A two-hour meeting of the party's general council yesterday instructed the negotiating team to draw up a final report on the merger.
The decision opens the way for a merger, possibly by the end of the year.
Although there is no timetable, the leaderships of both parties are anxious to settle the matter before local and European elections next June.
The Labour leader, Mr Ruairi Quinn, expressed satisfaction with the result. He acknowledged there were concerns about the merger, but insisted the proposals carried broad support.
"In the end, though, this may not go ahead. There are difficulties but they are not insurmountable," he added.
Only two of the 40 people present at yesterday's meeting in Dublin voted against a motion on the issue, according to party sources. About three people abstained.
For the first time, the party publicly acknowledged that a "merger" was envisaged; up to now, the proposals were generally referred to as an "alliance".
Democratic Left said it would consider the Labour decision, and the state of discussions, at a party executive meeting this weekend.
The Labour motion reads: "That the general council hereby gives a further mandate to the negotiating team to further explore the concerns brought to the group's attention by constituencies and branches before making a final report to the general council on the possibility of bringing about a merger between the Labour Party and Democratic Left."
An attempt to substitute the reference to "merger" with "merger or alliance" was overwhelmingly defeated.
One general council member who voted against the motion, Ms Rois in Shortall TD, said concerns had been raised about the merger's effect on the traditional Labour vote. "There's not much point in going ahead with a merger if there isn't going to be a net gain."
Ms Shortall, who shares the Dublin North-West constituency with the Democratic Left leader, Mr De Rossa, is one of those most under threat from a merger.
Ms Shortall called for independent analysis of the experience of party mergers in other European countries.
The only research carried out on the subject in the Republic suggested the left would end up with fewer, not more, seats, she said.
