New funding for creches will only be available for those that freeze their prices.
The Government today announced it will allocate extra funding to the sector.
Creches will get extra funding of over €200 million a year from 2023 onwards.
However, Children’s Minister Roderic O’Gorman says this is conditional on fees staying the same.
He said: "In previous years, when the Department had put money into the National Childcare Scheme, it almost always got eaten up by a fee increase.
"In future years, when we put more into the NCS, parents will actually see the amount they pay decrease."
The deal will also be conditional on companies agreeing to a new pay deal for staff.
Minister O'Gorman said work is underway to create an employment regulation order for the sector, which would ensure childcare staff will see "that much-deserved wage increase".
People Before Profit TD Paul Murphy says the changes will be welcome if they lead to increased wages for childcare staff and put a stop to massive price increases for families.
However, he warned the Government's also "doubling down" on a childcare system that isn't publicly owned or operated.
Speaking on The Hard Shoulder, he said: "Fundamentally they’re sort of locking themselves into a system that is not publicly provided.
“Almost 60% of funding comes directly from the State and the rest comes from fees paid by parents… but it is privately provided. We have the highest percentage of private, for-profit childcare provision in the OECD.”
Deputy Murphy says the Government should instead be shifting to an alternative track where childcare is publicly provided and "free at the point-of-use".
He said the current approach means big childcare providers are out there to “maximise profit” - and the State is just facilitating that.