EDUCATION Minister Batt O'Keeffe admitted today a €1.1m home built for a university president "sounds lavish".
Mr O'Keeffe is to have the matter investigated by officials in his department and a report will be prepared.
However, he added that it is his understanding taxpayers money was not involved in the outlay.
"It sounds lavish, doesn't it," Mr O'Keeffe said on being told further details of the luxury house built for University of Limerick (UL) president Professor Don Barry.
Fine Gael Education spokesman Brian Hayes said the expense has been incurred at a time when college registration fees have been hiked from €900 to €1,500.
The total bill for the home, which overlooks the River Shannon on UL's campus, has not yet been finalised, as Prof Barry and his wife are only due to move in next month.
It is expected the final expense could reach €2m.
Mr O'Keeffe said that he believed the "money was provided through philanthropic sources".
The university spent €124,266 on the project by the end of September 2008 -- before any building work had begun, according to accounts filed by UL company, Plassey Campus Developments.
The third level institution employed top architect Shelley McNamara, of Grafton Architects, to design the three-storey home, which will also be used by future UL presidents.
Ms McNamara is the sister of well-known developer Bernard McNamara.
Plans show the luxury home has reception and living rooms, a double-height dining room with a terrace, a family living room and kitchen and five bedrooms.
The university recorded a deficit of €1m in its most recently published accounts, while it has an accumulated deficit of €3m.
Mr Hayes said he was "astonished" that the university could engage in such extravagance when it is in deficit.
UL said the cost of the building has been funded entirely from private and philanthropic donations.
Prof Barry, the university's third president, will be the second only university president in the country to receive his own residence on campus, after Trinity College Dublin.
The home is located at Garraun, Clonlara, Co Clare, on the northside of the campus.
"UL is widely regarded as one of the most beautiful campuses in Europe and I feel privileged to have the opportunity to live on campus while I am President," he said.
"I look forward to welcoming colleagues and visitors to the house in the coming months and years and to the benefits that this fine building will bring to UL in the future."