Cork, Limerick and Waterford will dramatically expand over the next 22 years in a bid to act as strategic counterweights to Dublin.
The dramatic expansion of the three Munster cities has been earmarked as a key priority for Project Ireland 2040 with the €1bn M20 Cork-Limerick motorway a key centre-piece of the plan.
Waterford will also get funding for its ambitious €500m North Quays project which will include a new River Suir bridge.
The Construction Industry Federation (CIF) hailed the ambitious blueprint as "a game-changer" for Munster.
CIF regional director Conor O'Connell said the south would now be able to deliver on its vast potential.
"It represents a game-changer for the southern region and for the Irish economy. Cities like Cork, Limerick and Waterford and our regional towns can be developed into a dynamic regional economy in the south that can counter-balance the Irish economy’s over-dependence on the greater Dublin area," he said.
"The construction industry in the region has significant capacity to deliver the essential housing, infrastructure and specialist buildings underpinning the ambition outlined in the National Planning Framework."
"Projects such as the M20 will ensure greater access to Ireland’s regions and enhance regional connectivity. The commitment to invest in infrastructure will of course be welcome news for the construction sector throughout the region as the industry returns to normal levels of output.
"Currently the industry accounts for approximately 7pc of GNP well below the 15pc level that is considered sustainable for a growing economy as Ireland’s."
Other major road projects include the Ballyvourney and Adare by-passes as well as the Limerick-Waterford and Tralee-Limerick roads.
Cork Chamber of Commerce also welcomed the emphasis on growth within the south and south west regions.
The chamber said the vast potential of Cork and its hinterland was getting proper recognition.
A key element of the blueprint will be capitalising on the potential of Cork's docklands - with a new motorway to the pharmaceutical-chemical hub at Ringaskiddy also set to underpin expansion and job creation.
However, the long-awaited €1bn M20 Cork-Limerick motorway is the most ambitious element of Project Ireland for the south.
The motorway has long been hailed by Cork and Limerick Chambers of Commerce as central to directing growth and trade towards regional cities rather than Dublin.
It is also expected to act as a major stimulus to vital regional towns such as Mallow, Charleville, Croom and even Kilmallock.
In Waterford, the North Quays project is seen as vital to the city's economic development.
Senator Paudie Coffey said the North Quays project allied to the development of University Hospital Waterford (UHW) and Waterford Airport are vital to driving growth and expansion across the south-east.
"This represents a new era for Waterford city and county," he said.
“The time has now come for Waterford city and county to reach its full potential. Waterford city will now have access to crucial capital investment needed to develop critical infrastructure to build capacity and scale so that it becomes the regional driver for economic success within the South East region.”