TANAISTE Eamon Gilmore said Pope Francis's focus on tackling poverty and world hunger was the reason behind the reopening of a "scaled-down" Irish embassy in the Vatican.
In an interview with the Irish Independent, Mr Gilmore insisted that relations between Ireland and the city state hadn't been damaged by the controversial decision in 2011 to close the embassy for cost reasons.
The total annual cost will be €4.7m but the minister said the money will come from the Department of Foreign Affairs' existing budget.
The move to close the Holy See embassy was widely perceived as a low point in relations between the Vatican and Ireland amid the child-abuse scandal.
The decision was criticised in many quarters and was particularly unpopular among many members of Fine Gael.
But Mr Gilmore insisted the closure was always a financial decision, and that the new embassy will be a "modest" and scaled-down operation.
"Every department had to reduce expenditure. Every department had to downsize. Here that meant closing a number of embassies," Mr Gilmore said.
"What we are opening in the Vatican will look and feel quite different from what we had before.
"This will be a one-diplomat operation. It will be a modest operation and will have the aid focus that I talked about.
"All of what we're doing today is being done within the envelope of the current budget. There is no additional cost."
Dublin's Archbishop Diarmuid Martin said the move would enhance relations between Ireland and the Holy See, after heightened tensions in recent years including the Taoiseach's unprecedented attack on the Catholic Church in a speech on clerical sex abuse in 2011.
But Mr Gilmore denied that relations had been soured over the past two years without a resident ambassador in the Vatican.
The current head of the Department of Foreign Affairs, David Cooney, served as non-resident ambassador.
"We appointed an ambassador. The secretary general of the department was appointed as our ambassador," he said.
Mr Gilmore said the decision to re-open was taken because of the huge emphasis placed on poverty, development aid and human rights by Pope Francis, who was elected in February last year.
"I've been particularly impressed by what Pope Francis has been saying about his priority to tackle world hunger and poverty," he said.
"The issue of hunger and poverty is now at the centre of the international agenda.
"That's why we're opening a one-person mission to the Holy See, which will have a focus on aid and poverty and hunger agenda."
Mr Gilmore said the embassy would be very different to the previous operation, in the Villa Spada, which is now used as the Irish Embassy to Italy.
A new office will be sourced for the Holy See embassy, which will be staffed by one diplomat at First Secretary level.
Ireland has 300 diplomats in 73 locations abroad, allowing relations with 176 states.
The Vatican's ambassador to Ireland, Papal Nuncio Archbishop Charles Brown, said the decision to re-open an embassy in the Holy See was "excellent" news for the people of Ireland.
Cardinal Sean Brady said diplomatic relations between Ireland and the Vatican remained productive, even when the embassy was closed.
"Based on our shared commitment to justice, peace, eradication of poverty, international development and the protection of the environment, I now look forward to ongoing and fruitful co-operation between Ireland and the Holy See for the common good," he said.
Archbishop Diarmuid Martin said re-opening the Holy See embassy on a smaller scale was a very constructive exercise and would enhance relations with the Vatican.