UP to 1,000 new graduate nurses will be offered two-year contracts on salaries of around €22,000.
The new scheme is aimed at stemming the flow of nurses to countries like Australia – where they can earn salaries of over €40,000.
The pay rate is 80pc of the starting salary of a full-time new recruit, but Health Minister James Reilly said it could be boosted to around €26,000 as a result of premium payments.
Some union figures criticised the pay being offered to the young nurses.
The Health Service Executive (HSE) said it would mean savings of around €10m in its agency nurse and overtime bill next year.
"It also gives nursing and midwifery graduates an opportunity to gain substantial clinical experience to further their career and professional development, with the security of a two-year contract and salary," added a spokesman.
Dr Reilly said he expected that recruitment could start from as early as next month.
Nursing unions recently claimed that up to three quarters of the 1,500 nurses who were granted registration in Ireland earlier this year would have to emigrate to find permanent employment.
Commenting on the move, Seamus Murphy of the Psychiatric Nurses Association (PNA) said last night the salary would amount to around €10.50 an hour.
"These nurses have a degree after studying for four years but they would earn more working in Aldi," he said.
Around 300 students on psychiatric courses, many of whom are mature students, will graduate in September, but they would be better off going back to their old jobs if they could, he added.
He said it was difficult to predict the take-up for the jobs as many qualified nurses had already emigrated to work abroad.
Sunday and bank holiday pay rates would amount to around €90 an hour for the graduates.
The HSE said it would get nurses "deployed across many specialties" within hospitals and other areas of the health service, which currently rely on agency staff and overtime to maintain services.
The HSE lost many experienced nurses earlier this year through its incentivised retirement scheme and these have not been replaced.
But many Irish nurses are being lured abroad, particularly to Australia, with offers of good hours in modern hospitals on generous salaries.
A recent survey by the Irish Nurses and Midwives Organisation claimed that nurse staffing levels in Ireland are at critically low levels and below those of comparable wards in the UK.
It said that inadequate staffing is associated with longer lengths of stay and increased rates of re-admission, both of which lead to increased healthcare costs.
It increases the risk of burnout among nurses and also increases the chances of the patient getting poorer care.
The advantage for the patient of having newly graduated nurses on contracts is that they bring continuity to the hospital or community service in which they are working – instead of agency staff who may change from day to day.