Taoiseach Micheál Martin has confirmed that reopening of indoor hospitality will not go ahead as planned on July 5.
However other changes, including an increase in wedding attendees to 50, can go ahead as planned.
Mr Martin said the delay to reopening was as a result of concern around the Delta variant of Covid-19.
Government is now set to work on a plan to allow those who are fully vaccinated or have recovered from Covid-19 to dine indoors.
Mr Martin said Government will “work urgently” with the relevant sectors to agree a “practical and workable approach”.
He said that Ireland is in a “race between the variant and the vaccines” and that Government wants to do everything possible to make sure that the vaccine wins.
“Four million doses of vaccine have already been administered and each additional week means that hundreds of thousands of additional vaccines can be given to people,” he added.
The Taoiseach encouraged people to avail of the vaccine when it is offered to them.
He added that the vaccine programme is “building the wall” of much-needed protection against Covid-19.
“It will not be impenetrable, we know that, but it will be a massive defence against Covid, including the Delta variant.” He stressed the importance of not losing the progress made to date and said that he is satisfied that the adjustments to the Government’s reopening plan, agreed by Cabinet this morning, represent a “sensible, safe and balanced way forward”.
The Taoiseach acknowledged that the tourism and hospitality sectors have carried a “disproportionate burden” throughout the pandemic and promised additional supports.
Ministers have agreed to delay the reopening of indoor hospitality to come up with a system that would allow only fully vaccinated people to eat and drink inside bars and restaurants.
The Cabinet today assessed whether the system could be put in place which would see people having to prove they are fully vaccinated against Covid-19 to be permitted inside dining spaces.
The plan means that the reopening of indoor eating and drinking, due to take place next week, will be postponed until July 19.
The proposal came after the National Public Health Emergency Team (Nphet) raised concerns about the Delta variant during a late-night meeting on Monday with the Cabinet Covid Sub-Committee.
Minister for Transport, Eamon Ryan, said the Government would engage with those in the hospitality sector.
However, the Licensed Vintners Association (LVA) said it will reject any move to separate the vaccinated from the non-vaccinated, describing the suggestion as “ridiculous and unworkable”.
Donall O’Keeffe, chief executive of the LVA, said: “This latest suggestion from Nphet that pubs and restaurants should police who is and isn’t vaccinated is utterly ridiculous and unworkable.
“Nphet has lost the run of themselves and possibly the entire country this time.
“Does anyone in Nphet actually take into consideration the real world implications of these outlandish ideas at all? We can’t take them seriously after this.”
The unexpected proposal has also caused unease over its legal aspects.
Fine Gael TD Colm Brophy said enforcing the system would be “extremely difficult”.
He told Today with Claire Byrne: “I have reservations and can really see the problems in trying to implement a system around people being vaccinated and not being vaccinated.
“It is a really, very difficult thing to do.” Nphet recommended pausing the reopening of indoor hospitality until Government comes up with an “enforceable” system to prove people have been vaccinated.
However, Nphet also recommended that the numbers attending wedding celebrations indoors in July could increase from 25 to 50.
Speaking ahead of the Cabinet meeting on Tuesday, Mr Ryan said the reopening will likely be delayed.
“We have to make a decision in Cabinet today, but yes, I expect that,” he added.
“The modelling from Nphet presented last night was worrying – concern with the Delta variant.
“Even with vaccinations and how it could effect hospitalisations, which is the key metric.
“I think we will have to take a little bit of time and talk to stakeholders, talking about how we manage our response but we are still progressing.”
“We will continue to progress, we are getting there.
“We take our time and make sure we get it right, including getting hospitality back and other activities.”
Reacting to the LVA’s statement, Fianna Fail senator Lisa Chambers tweeted: “Sensible response and fair to young people and those who cannot take a vaccine.”