The broadcasting levy paid by local radio stations to the Broadcasting Authority of Ireland (BAI) will be waived for the first six months of the year.
Communications Minister Richard Bruton has made the announcement in response to the COVID-19 outbreak.
He says the sector is experiencing financial strain as a result of a drop off in advertising revenue.
He also says this will recognise the importance of local radio stations to their communities during this time.
Minister Bruton says he has also asked the BAI to assess the financial situation of local radio as a result of the pandemic.
"So what I've done today is I've arranged that the BAI would waive two-quarters of the levy that is paid to the BAI.
"That will be close to €1m worth of immediate relief.
"I'm also asking the BAI to do an assessment urgently of the financial impact that is occurring to local radio stations, so this can influence our decision-making as we move along".
He adds: "In common with other businesses, the local radio sector has experienced financial strain as a result of a drop off in advertising revenue."
Local radio stations are also entitled to the range of measures announced by Revenue and the banks.
The move followed calls on Thursday for financial supports for local and regional radio stations.
Outgoing Labour Party leader Brendan Howlin said money must be set aside to ensure their survival.
During a speech about the coronavirus outbreak in the Dáil, Mr Howlin made what he called a "plea to Government".
"Local radio is a vital source of information, and people in my own constituency of Wexford and elsewhere listen assiduously to local radio for news and advice.
"Due to the current crisis, many businesses have pulled their ads, cutting off vital funding for local radio.
"Already some staff have been laid off.
"Can the Government please ensure that local radio is supported with a small amount of money to ensure that this vital lifeline remains fully active throughout the crisis."