A 'general' payment will be made for the entire period of residency
The Justice Minister Charlie Flanagan has announced the Magdalene Restorative Justice Scheme is to be widened to include 14 adjoining institutions.
These will include all of those recommended by the Ombudsman in November 2017.
A 'general' payment will be made for the entire period of residency and a 'work' payment for the period of work in a laundry.
The Department of Justice said central guidance will also be drawn up on the development and operation of any future redress schemes.
Minister Flanagan said: "I am pleased to announce that the Government has agreed to my proposal to apply the Magdalene Restorative Justice Scheme to women who worked in the laundries and were resident in these adjoining institutions.
"This is an important step in implementing the key recommendation of the Ombudsman."
Back in April, Minister Flanagan announced the steps which were being taken in relation to the implementation of the Ombudsman's recommendations.
This included the establishment of an interdepartmental group to review the eligibility of cases of women who worked in one of the institutions covered by the scheme, but who were officially recorded as having been admitted to a training centre or industrial school located in the same building, attached to or located on the grounds of one of the Magdalene laundries.
This group has now completed its work and the minister brought proposals to Government, which have been approved.
Minister Flanagan also updated the Government on the progress being made in relation to the other two recommendations of the Ombudsman.
A senior counsel is independently reviewing cases where there is a dispute in respect of length of stay, and is also advising on assistance to be given to applicants who lack capacity to accept an award.
Mr Flanagan added: "Following on the constructive discussions that both myself and the Taoiseach had with the Ombudsman in April, officials in my department have continued this process of engagement. I am committed to progressing action on the Ombudsman's recommendations in consultation with his office, and I will, as necessary, bring further updates and proposals to Government."
The Government introduced the Magdalene Restorative Justice Scheme back in 2013.
Since then, 692 applicants have been paid just over €26m in lump sum payments.
While qualifying applicants receive additional benefits - including an enhanced medical card from the HSE and 'top up' pension payments from the Department of Employment Affairs and Social Protection.