Irish authorities are to evacuate 1,000 civilians by chartered ship from the besieged Libyan city of Misrata.
Humanitarian group the International Organisation for Migration (IOM) will arrange the emergency mission from the city, which has been under intense fire by forces loyal to president Muammar Gaddafi for almost eight weeks.
Irish Aid is putting up €300,000 to fund the mission and another €200,000 to support the evacuees when the boat arrives at the rebel stronghold of Benghazi.
Tanaiste and Foreign Affairs Minister Eamon Gilmore said the Government felt a responsibility to act.
He added: "Gaddafi's forces have agreed to allow ships into the port to evacuate civilians and we have requested that the IOM undertake an emergency operation on our behalf.
"Irish Aid officials have been in close contact with them over the last few days, putting in place the necessary measures for the mission to take place."
Libya's third largest city, the only rebel stronghold in the west of the country, has been under siege by forces loyal to Gaddafi for almost eight weeks.
The United Nations (UN) last week estimated that at least 20 children have been killed in the hostilities.
The IOM has already carried out three rescue missions, funded by Britain, Germany and the European Commission (EC), but it is not yet known when the latest attempt will take place.
The €500,000 sum brings total Irish support for the IoM operation on Libya's border to €1 million.
Irish Aid has also provided 18,500 blankets and 100 tents from its stockpile at the UN humanitarian base in Brindisi, Italy.
The supplies were transported by ferry from Salerno to Tunisian capital Tunis, and then taken by road to the border with Libya.
Jan O'Sullivan, Minister for Overseas Development and Trade, said the mission will help save lives.
She added: "The humanitarian situation in Libya is continuing to deteriorate, with thousands of people urgently needing assistance in camps along its borders as well as within the country itself.
"Irish Aid has already provided 18,500 blankets from its stockpiles as well as emergency funding. This evacuation mission will help to safeguard as many lives as possible."
Amnesty International Ireland said the Government deserved immense credit for its decision to evacuate the civilians.
Colm O'Gorman, executive director, said: "The people of Misrata are now in the middle of a full-fledged humanitarian crisis.
"Earlier this week Amnesty International called on the international community, including Ireland, to act to protect the civilian population.
"With civilian casualties in Misrata mounting day by day, the decision announced today will help save lives and the Government deserves immense credit for its actions."