Bord na Móna has suspended all peat harvesting for the foreseeable future.
The move came amid a High Court challenge over the planning regulations governing extraction at the company's remaining commercial bogs.
Workers who were to be employed in harvesting this summer are to be redeployed to peatland restoration projects instead. However, work at peat-based businesses including Derrinlough briquette factory, Edenderry power station and the Kilberry horticulture facility are to continue for the time being because they operate on existing peat reserves.
Bord na Móna said it had taken the suspension decision to provide security to workers facing uncertainty over their immediate future.
It added it would continue to seek permission for harvesting, but said it would have to "overcome a range of legal and planning challenges".
The move is seen as an acceleration of the company's longer-term 'brown to green' strategy of withdrawal from peat harvesting, and throws doubt over whether harvesting will recommence. Moving out of peat is expected to save 1.25 million tonnes of carbon emissions a year.
Bord na Móna chief executive Tom Donnellan said: "As a company, we are supporting Ireland's response to the ever-increasing challenge posed by climate change."
Climate Action Minister Richard Bruton said he would finalise details of a peatland rehabilitation package with the company within weeks.
Friends of the Irish Environment had challenged the system of peat extraction, saying it breached European law.
The High Court ruled last year that until domestic law was clarified, extraction on bogs of more than 30 hectares would require planning permission.