Colleges and institutes of technology will be allowed to describe themselves as a 'university' when trying to attract foreign students.
International students are coveted by all colleges as they pay higher fees than domestic undergraduates. But students from many countries do not rate third-level institutions unless they have the title 'university' in their name.
The perception leaves institutes of technology at a competitive disadvantage when going up against similar colleges from other countries that are called universities.
But the problem around the name even extends to the country's most prestigious university, Trinity College Dublin (TCD).
It is considering a name change to 'Trinity College, University of Dublin'. It is being considered as part of a drive to modernise and also to attract larger numbers of students from China, India and Brazil.
The change, which won't affect the university's status, is purely to change the perception of colleges abroad. But the name change is being opposed by academics at TCD.
Non-EU students pay fees in excess of €40,000 a year and are a valuable source of income for the college.
Education Minister Ruairi Quinn is to change the law to allow non-universities "in limited circumstances" to describe themselves as a university.
The change would only be allowed with the approval of the Higher Education Authority and would not mean the institutes of technology were attaining university status.
And only "high-quality institutions" will be allowed to make the change. Lower-level colleges won't be allowed to describe themselves as universities as the law still stands.
Mr Quinn will amend Section 52 of the Universities Act, 1997, which currently bans non-universities from describing themselves as universities.
Under the change, an institute of technology would be allowed to describe itself as a university in its sub-heading, such as 'DIT – a university of Dublin'.
The name of the third-level institution would not change – just the secondary description.
"It's a marketing tool specifically aimed at overseas students," a Government source said.
The Universities Act states: "Except in relation to an educational institution or facility established and described as such before the 30th day of July, 1996, in which case it may continue to be so described, a person shall not, without the approval of the Minister, use the word 'university' to describe an educational establishment or facility."
The law even allows for a High Court order to enforce the ban. "The Minister may apply to the High Court for an injunction to restrain any person from using the word 'university' in contravention of this section."
The country currently has seven universities: TCD, UCD, UCC, UCG, NUI Maynooth, University of Limerick and Dublin City University.