Iarnrod Eireann this morning took delivery of 67 new carriages, which will be used on the Dublin to Cork line.
The first of these carriages, bought at a cost of €117 million, will be running by the end of this year, with the rest in service by next Autumn.
Iarnrod Eireann is planning to have an hourly Dublin to Cork service by the end of next year.
Minister for Transport Martin Cullen said Irish Rail would be spending a further €343 million on 156 carriages in the next three years.
"We are moving from oldest to newest rail fleet in Europe in three years", the Minister said in Dublin Port this morning as the 67 new carriages were delivered.
"Many people, myself included, remember taking journeys on old, damp, unreliable trains. Decades of under investment in rail services are being corrected and we are seeing results.
"The Government is determined to fully exploit the potential of our rail resource. If we can continue to make the train a real option for people, we can reduce traffic gridlock", Mr Cullen said.
Iarnrod Eireann said it plans to replace the entire Intercity fleet by 2008 with 36 new carriages at a cost of €80 million. These carriages will be used on the Sligo, Maynooth and Drogheda routes.
It is also planned that 120 new Intercity carriages costing €262 million will be operating from Dublin to Westport, Galway, Limerick, Tralee, and Waterford by the end of 2008.