Irish Prime Minister Brian Cowen on Sunday night confirmed the European Union (EU) has agreed to the Irish government's request for a financial aid package from the EU and the International Monetary Fund (IMF).

Speaking at a press conference in Government Buildings in Dublin, Cowen said the rescue package, which will run for three years, will be tied to a banks restructuring and deficit reduction plan.

He said: "A formal process of negotiation will now commence that will lead to the provision of assistance, on the basis of a program to be negotiated by the government with the European Commission and the International Monetary Fund, in liaison with the European Central Bank."

"A central element of the program will also be to support further deep restructuring and the restoration of the long-term viability and financial health of the Irish banking system," Cowen said.

Cowen also said Ireland's 12.5-percent corporation tax rate was not a part of the negotiations.

The amount of funding will be decided during the negotiations. This is likely to involve the provision of tens of billions of euros from Europe to help Ireland, at interest rates that are more affordable than those currently available on international markets.

The financial assistance package to Ireland will be financed from the European financial stabilization mechanism (EFSM) and the European financial stability facility (EFSF), possibly supplemented by bilateral loans to be negotiated by EU member states.

Irish Finance Minister Brian Lenihan said Britain and Sweden have also offered to help fund the package.

The EU and euro area financial support will be provided under a strong policy program which will be negotiated with the Irish authorities by the European Commission and the IMF in liaison with the ECB.

The program will address the budgetary challenges of the Irish economy in a decisive manner on the basis of the ambitious budgetary adjustment and comprehensive structural reforms that will be contained in the Irish government's Four-Year Budgetary Strategy.

Lenihan also stressed the positive aspects of the Irish economy, saying that there are underlying fundamentals in the Irish economy which are very, very sound.

"We have seen a 6-percent increase in exports year on year this year. It is estimated that our balance of payments will move into surplus next year and when you aggregate our public and private sectors we will be paying our own way in the wider world," he added.

The prime minister said the Irish government will publish its four-year recovery plan for the economy early next week.

The Irish government held a cabinet meeting on Sunday afternoon to sign off on the details of the four-year strategy to deal with the debt crisis.

The plan is designed to bring Ireland's budget deficit back to within 3 percent of GDP by 2014.