Mullingar has been chosen as the site for the National Transport Museum, which is expected to cost up to £10 million.
Mr Michael McDonnell, the chief executive of CIE, confirmed this week that following an extensive evaluation of sites for a National Transport Museum, he had approved a proposal to locate it in the Co Westmeath town.
He said the prime consideration in choosing Mullingar was the presence of a very dedicated and supportive community-based group, Mullingar Arts and Railway Group Ltd.
Yesterday Mr Billy Roe, chairman of the group, said there is great delight in Mullingar at the decision.
Mr McDonnell, who visited Mullingar to make the announcement, said that CIE would be the facilitator for the project, which would draw the heritage assets together in one place.
It would provide the site, which is very close to the centre of the town. It would also provide the main exhibition material and, in many instances, the necessary skills to complete and restore elderly vehicles.
He said the museum would be a working one. It would include a steam train run between Mullingar and Athlone, which would be a fitting tribute to the magnificent generations of craftsmen in CIE.
He added that from a commercial perspective CIE hoped the museum would raise the profile of public transport in the economic and social life of the State, and provide extra business through individual travel and tour packages and educational group marketing.
He said that the three transport modes which could readily be integrated into the heritage project were identified in Mullingar: the railway, the roads and the waterway.
"It is envisaged that the museum should include a reasonable length of railway, preferably on a little-used section of Iarnrod Eireann, and that operational locomotives and rolling stock now in the care of preservation societies should be stabled at the site."
Mr Roe said that the announcement was "like a dream come true" for the local committee and for the people of Mullingar, who had fought so hard for this museum.
"Getting the approval of CIE was the most important thing. Now everything will fall in place and the plans we have laid for so long should be achievable," he said.
"We have everything here that is necessary. CIE have given the necessary land. We are close to the highest density of population in the country.
"We have a great railway tradition in this town and existing transport building and a road infrastructure. But most of all we had the disused link between here and Athlone.
"Most people do not realise the potential there is for film-making on railway lines which are not in perpetual use.
"We have 28 miles of line between here and Athlone which will have wonderful potential for film-makers.
"The film, The Last Great Train Robbery, which starred Sean Connery, was made on this stretch of line and it is wonderful to think that it will be used again.
"CIE has done its bit. Now it is up to us to get the necessary funding to ensure that the scheme works and that it will become one of the most important tourism sites in the country.
"We have ideas where we will get funding but we will expect help from national Government, and because it will be a national museum we will be looking far and wide for help.
"If things go as scheduled, we would like to be in operation within two years. But as of now, our main delight is that we have secured the site and everything is possible."
He said that the project could cost up to £10 million but would, when set up, be a very worthwhile development not only for Mullingar but for the State.