The Government is to provide €7.5 million for the development of City of Derry Airport.
Minister for Foreign Affairs Dermot Ahern said today the funding had been agreed in principle. The British government will match the amount, meaning the project will receive a total of €15 million from the two governments.
The funding is to be provided in response to requests from Derry City Council.
Mr Ahern said the airport was "a prime example of transportation infrastructure which serves communities on both sides of the Border.
"We believe that this investment package will make a very real contribution to the economic development of the entire North West region. Projects like this show the practical mutual benefits of working together."
The decision in principle is subject to state aid clearance, and other conditions, to provide 75 per cent grant support.