Executives at Allied Irish Bank (AIB) will not receive backdated bonuses totalling 40 million euros after the country's finance minister intervened.
The bank's board made the decision after Brian Lenihan threatened to withhold state funding, the BBC reports.
He said financial aid would be conditional on the non-payment of bonuses "no matter when they may have been earned".
AIB has already had a 3.5 billion euro bail-out.
The bank had argued that it had contractual obligations to pay the bonuses to senior staff members for work carried out in 2008.
Some staff had taken legal action to force the bank to pay up.
But Mr Lenihan says there's be no more state aid for the bank, if it does.
The Irish government is proposing a 90% tax on bonuses in the future.
