New planes will be bought with money raised from the float

The government will sell more than 50% of its shares to investors, with staff retaining their current 15% holding.

The sale is expected to raise 400m euros (�270m), allowing the firm to buy aircraft and expand its operations.

The Irish government insists Aer Lingus needs to be partly sold to guarantee its future but union leaders say that it could result in job cuts.

'Financial strength'

"This is the right decision for the company, its employees, customers and Ireland," Ireland's transport minister Martin Cullen said.

AER LINGUS FACTS Low-cost airline focussing on passenger transport Fleet of 35 aircraft 11 routes from Ireland to the UK 57 routes from Ireland to mainland Europe Long-haul flights to US and UAE

"It is taking place in order to give Aer Lingus both the commercial flexibility and the financial strength to succeed in what is a highly competitive global marketplace."

It would also give Aer Lingus "the access to capital it needs to develop new routes and to grow," he added.

Aer Lingus chief executive Dermot Mannion said that being listed on the stock market would offer the firm "significant profitable growth opportunities".

Investors will have to commit at least 10,000 euros to become a shareholder.

The price of shares will be set shortly before the flotation, after which the government will retain a stake of at least 25% in the company.