Joan Burton has admitted that some workers will not be happy with a 50 cent increase to the minimum wage.
The recommendation of the Low Pay Commission will be included in the budget, and will see the hourly rate rise to €9.15.
The commission findings were published this afternoon, with a promise to include an increase in the budget next October.
It is also understood that the PRSI system for workers and employers will also be changed, to mitigate the effects of the increase.
The Low Pay Commission says three of its nine members were unhappy with the proposed increase.
Two of the commission's nine members had called for the wage to be increased to €10 an hour, while another wanted it raised to €9.65.
The Tánaiste says she appreciates some people will be disappointed, but the new rate of €9.15 will go a long way:
Taoiseach Enda Kenny says the tax and welfare system will be changed:
Yesterday, the Jobs Minister Richard Bruton said a wage increase would be "a balanced compromise", while trade unions have said the increase does not go far enough.
The Irish Business and Employers group IBEC claimed a minimum wage increase would cripple companies.
Speaking after today's publication of the report, Head of Industrial Relations and HR at IBEC, Maeve McElwee, “policy decisions must be based on hard evidence, not aspirations. It is deeply frustrating to see important policy decisions being made in the absence of the necessary economic evidence."
Irish Small and Medium Enterprises Association (ISME) Chief Executive Mark Fielding said, "there is no justifiable economic argument for imposing a 6% increase on SMEs when inflation is practically zero. It is sad to say but the only reason for the increase is political survival in the upcoming election."
Labour TD John Lyons said in a statement that "the evidence based approach used by the Commission indicates that the Irish Economy can sustain a modest increase in the minimum wage, without causing harm to businesses."
You can read the full report here