Minister Flanagan and his Chilean counterpart met in Co Laois
Ireland and Chile have signed a Working Holiday Agreement, to encourage greater movement of young people between both countries.
It will allow up to 100 young people to travel each way annually.
The Foreign Affairs Minister Charlie Flanagan met with his Chilean counterpart, Minister Heraldo Muñoz in Killenard, Co Laois.
The meeting focused on political and economic developments, global issues - such as migration and climate change - and possible further measures to deepen relations between the countries.
Minister Flanagan said: "This is a significant visit, given that Ireland's relationship with Chile is strong and long-standing, dating back to the 19th century".
"Chileans of Irish descent such as Bernardo O'Higgins were prominent in the country’s foundation and there is a strong historical bond between our two countries" he added.
Trade between Ireland and Chile is growing - with pharmaceuticals, telecommunications, software and environmental solutions amongst the largest sectors.
While Ireland is a major importer of Chilean products, including wine and other beverages.
In 2014, merchandise trade between Ireland and Chile was valued at €145m - a 20% increase on 2013.
The most notable Irish-Chilean, Bernardo O'Higgins, is often referred to as the 'Father of Chile'.
He was the force behind Chile's Independence from Spain and was elected Supreme Director of Chile in 1817.
His Sligo-born father, Ambrose O'Higgins was a Spanish officer who served as military governor of Chile and viceroy of Peru.