Fifty-four families living in houses at the Curragh military base in Co Kildare have been served with eviction notices by the Department of Defence.
If they do not leave the terraced "married quarters", where some have lived for 20 years, the Department is prepared to have them forcibly removed within weeks.
The Department says the families have no legal right to occupy the buildings, constructed in the 1940s to house troops. Many of the residents are retired soldiers, who were told they would have to move out when they left the Army but never did so.
Notice to quit has also been served on two families living on military property in Dublin.
The Minister for Defence, Mr Smith, believes the majority of those ordered to leave can afford alternative accommodation and is concerned that they are living rent-free at the State's expense. He said: "The Department has been very patient and incredibly generous."
The householders have never been charged rent and owed over €100,000 in unpaid ESB bills. Several are former soldiers awarded deafness compensation payments of between €10,000 and €50,000, a Department spokesman said.
Notice to quit was served three weeks ago. If the residents do not move out within a month the Department warns it will refer the matter to the Chief State Solicitor's Office, which will oversee their eviction.
The Defence Forces representative body, PDFORRA, accused the Department of being heavy-handed and said the families had nowhere else to live. The Department spokesman said special treatment would be accorded to those in genuine hardship.