Negotiations are due to begin in May
The Public Service Pay Commission’s report is expected in the coming days, triggering talks on a new deal to replace the existing Lansdowne Road Agreement.
Speaking on Newstalk Breakfast, Minister for Public Expenditure Paschal Donohoe said he expects the report to be published by the middle of May.
Following that, the Minister is expected to invite the Public Services Committee of the Irish Congress of Trade Unions to commence negotiations on pay restoration.
"I believe the negotiations are going to be in incredibly challenging," he said. "There is a huge level of expectation but there's also a huge level of need within our public service.
"The need that I am clear on though is that we have to have an agreement that is affordable [and] that is fair to everybody."
Minister Donohoe said extending the Landsdowne Road Agreement is the fairest way to ensure this.
On the level of expectation from unions, Minister Donohoe said: "I think it's understandable on behalf of unions [...] We'll deal with the realism as part of the negotiations taking place."
Earlier this month, public servants say their pay has now fallen behind the private sector on average.
The Public Service Executive Union (PSEU) - which represents executive grades in the public sector - will be looking for an additional €1.6 billion for civil servants, including €1.4bn in pay restoration.
A major new report on Irish non-profits was launched today by the Minister.
Using public data derived from more than 8,000 nonprofit company reports for 2013, 2014 and 2015 in Ireland, Benefacts has identified some key trends in the sector, which today employs almost 150,000 people, turns over nearly €11bn annually and accounts for 8% of all current Exchequer expenditure.
"The aim of this project is to provide greater transparency regarding who gets what from where," he told Newstalk Breakfast.
On the issue surrounding the ownership of the new National Maternity Hospital, Minister Donohoe said it is a decision that will ultimately Minister for Health Simon Harris in his decision.
"What's important is that it has full clinical independence," he said.
It comes as the Former Master of the Coombe Professor Chris Fitzpatrick stood down from the project board of the National Maternity Hospital in support of Dr. Peter Boylan, who resigned on The Pat Kenny Show.