The new body must have 40% of social and affordable housing
A new Land Development Agency (LDA) is to build 150,000 new homes over the next 20 years.
The new body will have an immediate focus on managing the State's own lands to develop new homes, and regenerate under-utilised sites.
While in the longer-term, it will put together strategic landbanks from a mix of public and private lands - and make these available for housing.
Some 40% of any buildings on such lands have to be social (10%) and affordable (30%) housing.
The LDA will have capital funding of €1.25bn behind it, while a chief and management team are already in place.
It has an initial pipeline of land which is capable of delivering 10,000 homes - with 3,000 of these on lands which have already been secured.
These are in places such as Dundrum, Balbriggan, Skerries, Naas, Meath, Cork, Mullingar and Galway.
The agency will be a commercial State-sponsored body.
Speaking at the launch, Taoiseach Leo Varadkar said the agency 'will come to be seen' to be as significant as the decision to establish the ESB, Aer Lingus or the IDA.
"We are going to build new homes and lots of them.
"That includes social housing, affordable housing, private housing and cost rental housing on both publicly and privately-owned land.
"While the indicators show that the numbers of new houses being built is up by more than one-third compared to this time last year and is increasing month on month, we are still facing a huge challenge in meeting demand.
"We know we are playing catch up after our housing sector was destroyed.
"The Land Development Agency is a Government intervention that is 50 years overdue and which, in time, I believe will be seen to be as significant as the decision to establish the ESB, Aer Lingus or the IDA."
Housing Minister Eoghan Murphy has also signed the new agency into law.
The LDA will have two main functions:
The Government said the LDA is modelled on "best European practice" as already seen in Germany and the Netherlands.
The Simon Communities in Ireland say the development is positive, but have expressed concern that only 40% will be realised from the disposal of public lands.
It said this means that 60% of public land used could go towards private housing.
Spokesperson Niamh Randall said: "We would like to see further detail on today's announcement of a Land Development Agency.
"A long-term approach to land management should help in terms of planning and forecasting and to help control land prices and speculation.
"This is a step in the right direction and we certainly welcome the establishment of a national centre of expertise for State bodies and local authorities, with expertise in project management finance, planning, development and procurement with the right legislation.
"We look forward to more details on affordable and social housing requirements on land purchased by the agency where affordable housing is defined and determined by people’s income and ability to pay."
While it has expressed concern at "considerable red tape" in relation to approval, tendering and procurement processes at State level.
"We would look forward to seeing the details in addressing the timescales in terms of delivery with growing numbers in emergency accommodation month in, month out and housing pressures across the country this is urgent."