The Minister for the Marine has given the go-ahead for the offshore section of the controversial Corrib gas pipeline.
Mr Dempsey said his consent is "independent and entirely separate" from his position regarding the onshore section of the pipeline.
Five Mayo men - dubbed the Rossport Five - remain in jail at Cloverhill prison in Dublin over their protest against Shell's construction of the onshore section of pipeline across their lands in Co Mayo. They have refused to purge their contempt of a court order over the matter.
The Minister has insisted he will not intervene in the judicial process to get the men freed.
Mr Dempsey said the project was strategically important for Ireland in terms of enhancing security of gas supply. "In its peak years, the output from the field will reduce Ireland's dependence on imported gas by in excess of 50 per cent," he said.
"This is the second-largest inward investment project into Ireland, estimated investment of almost €1 billion. The project will also be a significant employer of up to 500 people during the construction phase and 50 permanent jobs when in production," Mr Dempsey said.
Green Party energy spokesman Eamon Ryan
At the weekend, Mr Dempsey ordered Shell E&P Ireland to dismantle the pipeline section that it had welded together onshore in north Mayo.
Just under three kilometres of pipeline had been welded without ministerial approval, and the Minister told the company it must be taken apart. He also told Shell it will be subject to closer monitoring by his new ministerial technical group as a result of the breach.
Shell is seeking advice following the Minister's order.
Mr Dempsey said the consent granted today was subject to a number of conditions, including compliance with all regulatory approvals applicable to this part (phase four) of the process.
"The consent is also given subject to the understandings in relation to the legal and regulatory obligations of the Corrib developers, set out in the Minister's letter to Shell, dated 31 July 2005. The Phase 4 consent also contains specific conditions in relation to a new regime of inspection and monitoring by the Minister's authorised officers," a statement said.
According to Mr Dempsey, this is the first time that specific mention of the new inspection regime has been made in an individual consent, although it is provided for under legislation.
But Green Party energy spokesman Eamon Ryan said it seemed the Government had been "on the side of Shell" from the very start in wanting to get the Corrib project completed as quickly as possible.
"If they had instead given proper time and attention to the public consultation and the design process then we would not be at the impasse that the Rossport locals and Shell are facing today," Mr Ryan said.
"Today's decision by Minister Noel Dempsey to grant Shell consent to lay the offshore section of the Corrib gas pipeline makes a mockery of his own supposedly independent safety review of the onshore section of the same pipeline," Mr Ryan said.
"If the Government was really representing the public interest then it would ask Shell to hold back on any further work on the project - off-shore as well as onshore - until all the safety issues are properly addressed."