The measure was due to expire in August.
The 9% VAT rate for the hospitality sector is to be extended under plans to be approved by Cabinet this morning.
The measure was due to expire at the end of August.
Its understood that the Finance Minister discussed the matter with coalition party leaders last night.
Paschal Donohoe will bring what is termed an "under the arm" memo outlining the details of the extension to cabinet this morning
It is not clear for how long the extension to the reduced rate of VAT will remain in place but there is speculation it could remain until the end of the year.
The lower rate was introduced following intense lobbying from the hospitality and restaurants sectors in 2020 when the country's was in the grips of the Covid pandemic.
The measure was also extended by the government in the budget in 2021
It is anticipated that extending the 9% rate until the end of year would cost in the region €200 to €250 Million.