Fianna Fáil and Fine Gael are set to begin “in-depth, detailed talks” on forming a government.
It comes after Micheál Martin and Leo Varadkar met face-to-face last night and today to discuss policy.
In a joint statement, the parties said the two men had “constructive” talks about a series of policy issues and the current political impasse.
The parties will now appoint negotiating teams to commence in-depth, detailed talks.
They will also continue talking to the Green Party.
“Both leaders are acutely aware of the enormous challenges facing the country, particularly with the onset of COVID-19,” reads the statement.
“They enter the talks as equal partners determined to develop proposals which will serve the interests of the people of Ireland.”
Up to now, Fine Gael has insisted it was preparing to go into opposition and would only enter Government as a last resort.
This evening, Deputy Martin said the COVID-19 outbreak had made the formation of a new government “an imperative.”
“Clearly the COVID-19 public health crisis has brought a new urgency to these discussions,” he said.
“That crisis and the enormous challenge that it represents to our society makes the formation of a government an imperative.
“That is why we have decided that representatives from both parties should engage and commence detailed, in-depth discussions this week.”
Leo Varadkar is now due to fly out to the US for the annual St Patrick’s Day visit.