Penneys has put plans to expand at Dundrum Town Centre on hold, as the coronavirus outbreak continues to wreak havoc on the economy.
In February it was reported that Penneys - which trades as Primark in the UK - and Brown Thomas were in negotiations to split the retail space in Ireland's largest shopping centre that is being vacated by House of Fraser.
"In light of the current situation, all expenditure is being reviewed and these negotiations are on hold," said a spokesperson for Penneys.
"Our current priority is to support our people and the business through this pandemic and we look forward to resuming business as usual as soon as possible once our stores re-open."
Penneys already operates an existing outlet in Dundrum Town Centre.
Both Penneys and Brown Thomas are owned by Ireland's wealthiest family, the Westons, who hold a majority stake in Primark's parent firm, Associated British Foods.
A spokesperson for Brown Thomas said the group is continuing with its plans for the shopping centre, which will see it take on two floors and 63,000 square feet at House of Fraser's current location.
This will mean the closure of Brown Thomas's existing, much smaller BT2 outlet in Dundrum.
Ireland's retail sector is being hit hard by the coronavirus pandemic, as the majority of shops have been forced close their doors in order to combat the spread of the deadly virus.
Restaurants, pubs and cafés were among the first places of business to pull down their shutters all over the country.
Arnotts and Brown Thomas have also temporarily suspended their online offering.
Dozens of retailers here including Penneys, River Island, Carrolls Irish Gifts, Burger King, KFC, Eason and Dealz last month said they want a 12-month rates freeze and a 50pc cut for six months after that to prevent an all-out collapse of the sector in Ireland due to the coronavirus crisis.