AIB will contact all 33,000 mortgage holders who are in arrears this summer with a view to working out a debt deal.
AIB CEO David Duffy said he was confident they would be able to strike a deal with all willing customers by the end of the year, and bring an end to mortgage misery for thousands of families across the country.
The bank chief also did not rule out mortgage write-downs in some cases.
His comments come as the Government and the Central Bank are discussing moves to force the banks to tackle their mortgage arrears as part of a new push to overcome the personal debt crisis.
But the discussions come amid claims that squeezed homeowners are being forced to go into arrears on their mortgages to get the banks to do a deal with them.
Families that have lost their income and have exhausted their savings are unable to get the banks to engage with them unless they fall behind on their payments, some experts claim.
Taoiseach Enda Kenny and Central Bank governor Patrick Honohan are understood to be frustrated at the banks failure to deal with the arrears problem.
The banks' failure to confront the issue is being seen as a big impediment to their country's recovery and to economic growth.
But Mr Duffy, speaking in Galway, where he is conducting a series of meetings with staff and customers, said the primary target was to return the bank to profitability by 2014 and that a significant part of that strategy was to sort out the mortgage crisis.
"We have set up a programme whereby we would look to have met with, and discussed, the restructuring with every single arrears customer by the summer of this year.
"We would look to have closed out on most of those restructurings by the end of the year."
Mr Duffy said that they would work with mortgage holders in arrears in an effort to find a solution.
The AIB chief executive maintained that the bank is increasing the amount lent each year.