A computer image of a redeveloped Lansdowne Road

Irish government ministers discussed the issue on Tuesday and later announced that they would provide "substantial funds" for the project.

The plan is for a �210m project which will see Lansdowne Road becoming a 50,000 all-seater venue by 2008.

The other national stadium option had been to build a new venue on a green field site at Abbotstown near Dublin.

This had been the ambition of the Irish Prime Minister Bertie Ahern which had led some to dub the mooted project as the 'Bertie Bowl'.

A statement from the Irish government also said they would back the phased delivery of a sports academy at Abbotstown which has been sought by the FAI.

This is expected to include a small ground with a capacity of around 10,000.

Confirming the Lansdowne Road scheme, Sports Minister John O'Donoghue rejected suggestions that Mr Ahern had been embarrassed by the decision.

The minister added: "Never before has there been a Taoiseach who has had such an interest in the development of Irish sport.

The stadium provides a really positive platform to develop all aspects of the game for future generations FAI chief executive Fran Rooney

"He is responsible for the progress we have made."

Mr O'Donoghue described the development as "a good day for Irish sport and a landmark".

"We are bringing our national sporting infrastructure into the 21st century."

Lansdowne, owned by the IRFU, is also used by the Republic's football team.

The IRFU and FAI said the government's decision was a "vote of confidence" for Irish sport.

"We greatly appreciate the support of the government in endorsing our ambition that Irish rugby and sport in general should have the facility of a stadium of this standard and magnitude," said IRFU chief executive Philip Browne.

"The stadium provides a really positive platform to develop all aspects of the game for future generations," added FAI chief executive Fran Rooney.

The new design encompasses the present precincts of the old Dublin 4 venue.

Bertie Ahern has given up on his Abbotstown dream

The plans show an integrated structure comprising a new three-tier structure for the East and West Stands with single-tier structures at the present terrace ends.

Each of the four stands will be completely covered by a sweeping, translucent roof that would minimise the effects of the weather.

The new structure is designed to minimise the impact on local residents, which could have a major bearing when planning permission is being sought.

The IRFU and FAI can now allay fears of any disruption to public transport services along the adjoining railway line during the redevelopment phase.

Spectators would also be able to enjoy the better pitch views, facilities and easy access to the wider stadium precincts providing for a relaxed atmosphere around the stadium prior to and after matches.

The proposed redevelopment is expected to be completed in 2008 and cost approximately �210m.

The IRFU and FAI will contribute around �70m with the government the remainder.

During the redevelopment of the stadium, the Irish rugby team and Republic of Ireland soccer team will have to play their home games outside Ireland - unless the Gaelic Athletic Association makes Croke Park available to other sports.