An Post has been selected as the preferred bidder for the Department of Social Protection's new cash payment services contract.
The department says contract discussions are ongoing between the two bodies and are due to be completed "shortly."
The new contract is worth some €100m and will run for two years from January 2020.
In 2018, almost 31 million payments - or 40% of all payments by the department - were paid in cash through An Post's network of post offices.
The department's cash welfare payments are currently governed by its Cash Services Contract, also with An Post.
This contract came into effect in January 2014 and is due to expire on December 31st this year.
The department was required by EU and national procurement rules to publicly tender for a new contract from the start of next year.
After the two year contract period is complete, the department has the option to renew the contract on an annual basis for a further four years.
Social Protection Minister Regina Doherty said: "Once the new contract is signed, the arrangements currently in place will remain unchanged for everyone who has chosen to receive their welfare payment through An Post."
Debbie Byrne, managing director of An Post Retails, added: "An Post welcomes the certainty provided by the latest announcement which will come as good news to Postmasters and our customers.
"Cash payments to the department's clients, which include pensions and child benefit, are an important element of the business of post offices and a clear example of the value of the post office network in delivering government services to local communities."