The Health Service Executive (HSE) is to recruit up to 1,000 graduate nurses and midwives in the new year.
The new appointments are expected to save the state health service around 10 million euro in 2013 as it will reduce its reliance on agency workers.
The HSE said in a statement that the Government had approved the recruitment drive, which will take place from early in the new year.
"This initiative will see graduate nurses deployed across the many specialities within HSE and HSE-funded services, which currently rely on agency staff and overtime in order to maintain services," it said.
The HSE added that its current arrangement with agency nurses and funding overtime was unsustainable.
The graduates will be employed under a two-year contract and paid at a rate of 80% of the first point of the salary scale of a staff nurse.
This means those appointed could earn up to 26,000 euro a year.