The new "super cruise" ship, which will be able to carry up to 1,500 cars or 330 freight trucks across the Irish Sea and will weigh 67,300 tonnes, is expected to be delivered in 2020.
When launched, the ship will be one of two super-cruise ships that will make the journey from the capital to Holyhead in Wales, and will increase peak freight capacity by 50% compared to Irish Ferries' Ulysses vessel.
Irish Ferries' parent company, Irish Continental Group, has agreed terms with a German manufacturer, Flensburger Schiffbau-Gesselschaft & Co, to build the ship.
Speaking about the new ship, Irish Ferries CEO Eamonn Rothwell said the investment "underpins the confidence" the company has in the Irish-British market despite the looming threat of Brexit.
He said: "The construction of a cruise ferry of this size will offer both additional capacity and an enhanced experience for both our tourism and freight customers.
"This infrastructural investment enhances 'the bridge' to the UK and continental Europe that is a vital part of the continued success of Ireland's open economy."