Private bidder was also pursuing €2.5m land in mountains
One other bidder was actively in pursuit of almost 5,000 acres of land in the Dublin Mountains that Nama agreed to sell to the Government.
Growing concern that the land would be sold to a private party led Minister of State Michael Ring to go public with the deal yesterday - even though the sale still hasn't been formally signed off yet.
The agency had been insisting it could not sell for less than the estimated market value of €2.5m, but the minister argued over recent weeks that this price did not take into account the fact that over 90pc of the land is off-limits for development.
Sources told the Irish Independent that Nama did eventually retreat somewhat from its asking price of €500 an acre - but the money changing hands is still "considerable".
Mr Ring said that final price will be revealed once the deal is finalised in the coming days.
The parcel of land, which takes in Kippure down to Glenasmole Valley and Bohernabreena Reservoir, was the largest to have come on the market in recent years.
Negotiations will now also have to take place with residents and farmers living in the area to decide what grazing rights, turbary rights and shooting rights they will retain.
Minister Ring told the Irish Independent the purchase would help create "one of the largest national parks in Europe". It will be added to the Wicklow National Park and managed by the National Parks and Wildlife Service, the Department of Arts and Heritage and the Dublin Mountains Partnership
"This is very good news for the whole country", Mr Ring said, adding that in this case Nama "are to be complimented for taking the national interest into consideration".
Almost 20,000 people had signed a petition calling on the Government to buy the land amid fears that sections could be developed for housing or wind farms. The land fell into Nama ownership after a developer who had owned it got into difficulties.
Nama had warned the Government would need to move "quickly" to prevent the land being sold to a private party.
Minister Ring added: "The Featherbeds are an important area for nature conservation and for public amenity. I believe an exceptional opportunity has been realised for the State in terms of the environmental gain and the amenity potential."
Dublin South West TD John Lahart, who had warned it would be "scandalous" to allow the mountainous terrain fall out of State ownership again, said local people would be relieved and delighted that a deal is in the offing.
Green Party leader Eamon Ryan said it was a "once-in-a-lifetime chance to protect a large area of the Dublin Mountains for the hundreds of thousands of walkers and nature lovers who value the uplands as one of the great things about our capital city".