Some 700 student accommodation units will be built across three universities under new plans.
The €32 million deal will see Maynooth University, Limerick University and the University of Galway receive additional state funding for accommodation which will be college-owned.
Higher Education Minister Simon Harris said that government is also working on a similar plan for DCU and UCD, both of which already have planning permission for additional accommodation.
Speaking to the The Home Show, Minister Harris said there's a "double benefit" to the new scheme, which will see more students living in purpose-built accommodation.
"If you can get a student into student accommodation, it's actually freeing up another private rental property for a family in much need", he said.
UCD recently shelved plans for 1200 student units due to high construction costs.
"What we're trying to do here is change the approach that we have to student accommodation", Harris said.
"Up until our decision this week, being quite frank, the building of student accommodation had either been left to the private market or to universities from their own resources."
"So this is the first time ever that the government ... have effectively stepped in with taxpayers' resources to try and get student accommodation projects, that have quite frankly been stuck, moving again."
He said the government will help universities that have been given planning permission for accommodation but are unable to fund.
"What we're trying to do is bridge the viability gap", Minister Harris said.
The new units will be built on Maynooth's main campus, while Galway and Limerick will have their additional accommodation built nearby.
"The difference this and previous models is that they'll be college-owned, or college-controlled", he explained.
"That's important to me because I think we need to build up a stock of college-owned accommodation that is not resulting in students having to compete with the rest of the population."
Below market rate
Minister Harris said that the additional funding is being provided to universities on the condition that the beds, when completed, are let at below market rate.
"We'll be working with the universities now to establish exactly what that means - and it'll mean different things at different parts of the country", he said.
"But it is important that where the taxpayer is investing money, that there is a below market rate rent available."
Listen back to the full conversation here.
Main image shows Higher Education Minister Simon Harris speaking to the media at TU Dublin, Grangegorman. Picture by: PA Images/Alamy