Air Canada will use its new low-cost Rouge airline to launch year-round flights between Toronto and Dublin in 2014.
Air Canada has traditionally served Dublin from Toronto with a seasonal summer service.
The all-year service will be handed over to its new low-cost offshoot next year.
Air Canada Rouge begins operations this summer, serving destinations in Europe including Edinburgh, Venice and Athens. It has a heavy emphasis on routes to the Caribbean.
Air Canada is hoping the Rouge operation will be able to generate profits where the parent airline often hasn't been able to.
Air Canada has said that it expects about half the incremental profits at Rouge to be delivered by putting more seats on the Rouge aircraft fleet. The wide-body aircraft Rouge will use will have 20pc more seats than Air Canada flights have.
Lower employee wages than those at the parent and more flexible working rules are designed to help secure the additional profit base.
Rouge aims to have 32 aircraft in its fleet by the end of next year, but some analysts have been sceptical as to whether the service will be as profitable as Air Canada hopes.
The move by Air Canada to service Dublin all year also puts it a step ahead of Aer Lingus.
The Irish airline, which releases first quarter results tomorrow and holds its annual general meeting on Friday, has been eyeing up a service to Canada.
Aer Lingus chief executive Christoph Mueller has said on a number of occasions that a service to Canada is high on the airline's priority list.
Air Canada chief commercial officer Ben Smith said there's a "strong market" for both leisure customers and visiting friends and relatives between Ireland and Canada. The country has been a popular destination for Ireland's new wave of emigrants.
Dublin Airport Authority strategy director Vincent Harrison said the decision was "excellent news" for both business and leisure travellers between the countries.