Diageo will spend €22 million on boosting capacity at the famous Guinnesss brewery at St James's Gate, Dublin, following the decision to centralise production of porter for the British and Irish markets in Ireland.
A spokeswoman for the firm said "new work practices and updated techology" meant the capacity increase will not require any additions to the plant's workforce.
St James's Gate will supply Guinness to both the Irish and British markets when Diageo closes its Park Royal brewery in northwest London in summer 2005, resulting in the loss of 90 jobs.
Tánaiste and Minister for Enterprise, Trade and Employment, Ms Harney, welcomed the move as a "very significant boost for St James's Gate brewery". She said the additional distribution from Dublin "seriously deepens the already strong presence of Diageo in Ireland."
To supply Guinness to theBritish market, the firm calculates St James's Gate will have to increase output by 50 per cent to 12 million kegs per annum.
It said annual costs at the Dublin brewing plant will increase to €14 million a year.
However, Diageo declined to reveal the cost of severance payments to the 90 workers who will lose their jobs next year at the London brewery.
A spokeswoman said the company is currently "in consultation talks" with its employees at Park Royal, which started brewing Guinness in 1936 after sales of Guinness outstripped production at St James's Gate amid rising demand in Britain.