The Government will open an embassy in Brasilia and a consulate in Sao Paolo before the end of the year to help boost Irish exports to South America.
Speaking after an hour of talks with the Brazilian President, Mr Fernando Henrique Cardoso, yesterday, Mr Ahern said the decision would mark a turning point in Ireland's relations with Brazil.
Making the announcement yesterday, he said the move was happening because "it makes sense for us to be seeking new markets to sell our exports where we have not previously done".
While the embassy will open in the political capital, Brasilia, the opening of a consulate in the business capital, Sao Paolo, signals the Government's intention to work to boost Irish exports to the country substantially.
Trade missions by business leaders from Ireland and Brazil will visit each others' countries before the end of this year.
The presence on the Irish delegation of the chief executive of Enterprise Ireland, Mr Dan Flinter, also underlines the central role of trade promotion in the Taoiseach's visit to South America's largest and most populous country.
Mr Ahern told a press conference later there was great potential for Ireland to export information technology products, chemicals and pharmaceuticals to Brazil.
Despite the emphasis on trade, the Taoiseach also had discussions on political issues with Brazil's President yesterday and later emphasised common positions on some foreign policy issues including disarmament. He also thanked Brazil for supporting Ireland's successful campaign for a temporary seat on the UN Security Council.
Mr Ahern was greeted at Brasilia's presidential palace yesterday with a welcome ceremony involving 300 troops in ceremonial uniform, a military band and a 21-gun salute. He had close to an hour of political discussions with Mr Cardoso, before attending a lunch hosted in his honour.
Speaking at the lunch the Taoiseach stressed Ireland's commitment to the European Union despite the result of the Nice Treaty referendum. That result showed that "we now need a full domestic debate on Europe".
He said he believed the outcome of the forthcoming National Forum on Europe "will confirm Ireland's commitment to full engagement with, and the enlargement of, the European Union".
On Northern Ireland, he acknowledged that recent difficulties had been particularly acute. However, all who were committed to peace and mutual respect among the people of Ireland were convinced that the process was irreversible, he said.
Mr Ahern said he was deeply grateful for Brazil's support in Ireland's campaign for the UN Security Council seat.
"Our collaboration in UN activities, not least in UN peacekeeping, where Ireland and Brazil have played important roles, has been close," he said.
President Cardoso said his country had never hesitated when backing Ireland as a candidate for the Security Council. "The traditional stance adopted by Ireland's foreign policy in support of peace, disarmament, the environment, development and democracy dovetails perfectly with the fundamental tenets espoused by Brazil in our international undertakings," he said.
He wanted the EU and the South American trade association, Mercosur, to deepen their relations over the coming years.
Mr Ahern travelled last night to Sao Paolo where he will meet business leaders and make speeches on foreign policy and trade issues today.