The Leaving Cert is on course to be radically reformed within three years with grade options almost halved and pupils facing a possible lottery for university places.
Education Minister Ruairi Quinn revealed an audit of the long-established exam has found questions are predictable and students memorise answers.
Mr Quinn said this was preventing pupils from developing their critical thinking and analytical skills, meaning they were ill-prepared for university.
"I'm hopeful now that we can get changes implemented following discussions and analysis with the education partners in time for a Leaving Cert examination in about two to three years' time," said Mr Quinn.
The minister said that the report, drawn up by the Higher Education Authority and the National Council for Curriculum and Assessment, recommended a return to an eight-point grading system.
The proposed grades would be scaled down from the current 14 options to A1, A2, B, C, D, E, F and NG.
Mr Quinn warned this could result in greater competition for third-level courses and the possible implementation of a lottery system among pupils with the same grades.
He said it was still too early to elaborate on possible details.
"You're going to get a cluster of students pretty much bunched around the same grade level that would be differentiated in the present points system," said Mr Quinn.
"And if there is a lot of them wanting to do the same subject then yes, there will be some degree of a lottery in some courses but these are matters that will be teased out."
Mr Quinn said that the quality of the curriculum has suffered as a result of pupils going into exams with prepared answers.
"When the exams come out for both the Junior Cert and the senior Leaving Cert the commentary from education commentators frequently is, 'It was a good exam, there were no surprises, it was as predicted'," said Mr Quinn.
"That's the subtext for saying that teaching to the text, anticipating which poet of the five or six poets at senior level is going to surface in the examinations means that the teachers who are under pressure, understandably, from their school and some parents, as well as from pupils, will concentrate on predicted questions that are likely to arise.
"Therefore the quality of the curriculum of the Leaving Cert is abandoned or bypassed in favour of concentrating on those questions that will arise and the preparation of tailored answers. That's not what critical thinking and analytical skills are about."
The minister said a possible solution to this would be for universities to reduce the number of courses available and to increase their capacity to absorb more students with a foundation year.
"There will be room for everybody," said Mr Quinn.
"If they are doing general course in science or a general course in mathematics, which could lead to specialisation in second, third or fourth year of their third-level college experience."
He insisted that proposed changes to the Leaving Cert and third-level education system will not affect pupils currently in fifth or sixth year at school.