Sport Ireland is to 'suspend and withhold' future funding to the Football Association of Ireland (FAI).
It has made the decision in the wake of the FAI's written opening statement to an Oireachtas Committee.
The football association will admit that it broke State funding rules when it appears before the committee.
It follows speculation over a €100,000 loan former CEO John Delaney gave the organisation out of his own pocket in April 2017.
FAI President Donal Conway will admit that the association broke State funding rules by not informing Sport Ireland about the loan.
According to the opening statement, he will say: “I refer to Clause 4.3 of the ‘Further Reporting’ section of our annual terms and conditions.
“It requires the association to notify Sport Ireland in writing in the event of any material deterioration in its financial position.
“We acknowledge that certain circumstances arose in April 2017 which were not reported to Sport Ireland.”
Sport Ireland decision
Sport Ireland says it's board has taken the decision to suspend and withhold future funding to the FAI in light of the admission.
In a statement this afternoon, Sport Ireland said: "In making the decision to suspend and withhold funding, the Board of Sport Ireland notes that the FAI has already been paid 50% of its 2019 funding to date and some positive steps taken by the FAI in recent days.
"This decision will be reviewed by the Board of Sport Ireland as a standing item at each of its future meetings."
It will consider reinstating funding once all reports commissioned by the FAI have been completed and recommendations adopted.
However, the board says it will need to be satisfied "that all necessary processes and controls are in place to ensure the FAI’s ongoing compliance with the Terms and Conditions of Grant Approval".
The FAI receives around €2.7 million from Sport Ireland to cover a number of programmes.
In a statement, the FAI said it noted the Sport Ireland decision.
It said it's "unfortunate" that the organisation felt compelled to suspend funding.
FAI President Donal Conway said: "The €2.7 million funding Sport Ireland provides annually to the FAI is crucial to the development of an inclusive approach to football in Ireland. As indicated at its meeting with Sport Ireland last Friday and in recent correspondence, the Association is keen to restore trust and confidence and rebuild the relationship with Sport Ireland as soon as possible.
"The Association has committed to take all appropriate steps in this regard."
Mr Conway added: "I am fully confident that through the processes now in place, we will be in a position to satisfy Sport Ireland in relation to both governance and financial issues and ensure that the 50% balance of funding due for 2019 is restored at the appropriate time."
John Delaney - who's now the FAI executive vice president - will be among senior figures from the FAI appearing before the Oireachtas committee tomorrow.