The European Commission has approved a restructuring plan from Bank of Ireland which followed the Government's €3.5 billion cash injection into the bank last year.
"I'm confident that this plan will ensure a stable future for Bank of Ireland and contribute to financial stability in Ireland without unduly distorting competition," said EU competition commissioner Joaquin Almunia.
As a condition of this state-aid approval, Bank of Ireland is compelled to reduce its presence in the British corporate lending markets at two if its corporate loan portfolios are run down.
The bank is also obliged to sell its New Ireland Assurance and ICS Building Society subsidiaries.
With the sale of Bank of Ireland Asset Management (BAIAM) already underway, the bank is also obliged to sell its 17 per cent stake in the Irish Credit Bureau.
In addition, the bank has been directed to offer "certain services" to new entrants or to small banks already active in Ireland to reduce the cost for competitors to develop business in Ireland.
The Government has also committed to a number of "market-opening measures" to enhance competition in the banking market.
These include measures to enhance customer mobility between banks including being able to compare costs.