Parents will get more money to offset crèche fees and the State will play a greater role in providing childcare under plans being discussed by the three parties in government talks.
A new streamlined regulation system for the sector and pay increases for staff linked to improved qualifications are also being discussed by Fianna Fáil, Fine Gael and the Green Party.
The outgoing government has already published legislation to set up a commissioner who would have powers to fine and block internet companies that do not comply with rules aimed at keeping users safe.
The parties have agreed that a childcare package in a new programme for government will commit the State to investing more in childcare subsidies for parents and ultimately playing a greater role in childcare provision.
There has been a 141pc increase in government funding for childcare over the last five years, but the sector has been historically underfunded.
"We are agreed on the direction of travel," a source involved in the talks said.
Fianna Fáil and Fine Gael have already committed to reforming the childcare sector, improving accessibility, reducing costs, raising standards and providing childcare workers with a sustainable career pathway in their joint framework document published in April.
The Green Party's manifesto focused on reducing childcare costs for families through subsidies and capping costs.
Establishing a new regulatory system has also been discussed by the parties with childcare providers previously raising concerns that the existing regulations are applied inconsistently.
The Children's Rights Alliance said one issue is that childcare facilities are subject to inspections from Tusla as well as the Department of Education.
"There is definitely a case for having one inspectorate and making the inspections simpler," its chief executive Tanya Ward said.
The parties have also discussed improving pay for staff in the sector by linking their remuneration and conditions to career development such as training and extra qualifications.
Ms Ward said there was an opportunity for the State to improve pay and staff retention through the temporary wage subsidy scheme which is paying the wages of many childcare staff during the Covid-19 pandemic.
The Greens have pushed for the State to take over childcare providers in financial difficulty to ensure they are open when parents return to work, but this has not been discussed in the government negotiations.
The three parties discussed transport and tourism policies yesterday, with those involved saying there was more detail needed on how to achieve plans to have a 2:1 split in favour of investment in public transport over roads.
Doubts have been raised as to whether the existing budget for roads maintenance would be included in this ratio.
Doubts have also been expressed over whether a Green Party demand to commit 20pc of transport funds to cycling and walking infrastructure can be achieved.
The parties have also discussed reducing the Vat rate for the tourism and hospitality industry which has been effectively shut down.
"There was no opposition to that," one source said.
Meanwhile, Fianna Fáil leader Micheál Martin has called a special online árd comhairle meeting for June 5 to vote on amending party rules in order to allow a postal ballot of members on any programme for government instead of an ard fheis, which cannot be held under current Covid-19 restrictions.