Former Labour Court chairman Kevin Duffy will take charge
A Public Service Pay Commission is to be established, which will advise the Government about the future pay of public servants.
Public Expenditure Minister Paschal Donohoe also appointed Kevin Duffy, former chairman of the Labour Court, as its chairperson.
A further six members are to be appointed in the coming days.
The Public Service Pay Commission will provide an initial report in the second quarter of 2017.
Minister Donohoe stressed that the Government will retain the ability to negotiate directly with its employees in respect of pay.
The commission will not duplicate the work of the State's existing industrial relations bodies: the Workplace Relations Commission and the Labour Court.
Its role will be to provide evidence-based objective analysis on pay matters to assist the Department of Public Expenditure and Reform in their negotiation.
Meetings have already taken place in recent weeks with staff representatives in relation to the establishment of the commission.
It has met with the people from the ICTU, Garda representative associations, and the Representative Association for Commissioned Officers in the Defence Forces.
Terms of reference and an initial work programme for the commission have also been agreed.