An interim board for the Railway Procurement Agency (RPA) is to be set up with immediate effect.
The RPA will be responsible for the development of the new Metro and Luas lines.
The decision by the Government, confirmed by Seamus Brennan, TD and Minister of State to the Taoiseach, will mean that the Luas will open between Sandyford and St. Stephens Green in 2003/2004.
"While we were disappointed at the failure to get the necessary legislation enacted before the Dail summer recess, it is pleasing to see that immediate and positive action is now being taken by the Government.
Declan Martin, DCCDirector of Policy, said: "The imperative now is to proceed as quickly as possible with the tendering process for the first Metro line so that the indicative target date for the Airport link can be met."
This follows criticism earlier this week of the Government by the DCC over its failure to establish the Rail Procurement Agency before the Dail’s summer recess.
The Railway Procurement Agency, which will be responsible for developing the vital Metro and Luas lines in Dublin, was due to start work before the Dail summer recess.