The staunchly Catholic Irish Republic is to close its embassy to the Vatican.
Foreign minister Eamon Gilmore said the decision was made with the greatest regret, but was done to cut costs.
He denies it had anything to do with current relations between Ireland and the Vatican, which are at a low over the church's handling of a child abuse scandal.
The head of the Catholic church in Ireland, Cardinal Sean Brady, expressed his profound disappointment at the government's decision and hoped it would "revisited as soon as possible".
As well as the Vatican, Dublin is also closing the Iran and East Timor embassies, in a bid to save about 1.25 million euros a year.
Mr Gilmore said diplomats at the Italian embassy would move into the villa currently used by Vatican staff. The Vatican embassy in Dublin was first opened in 1929.
He said the government had to implement cuts to meet targets set out in Ireland's economic rescue deal backed by the European Union and the International Monetary Fund.