The development of Lansdowne Road would be subject to the rigours of the planning process, and the rights of all those affected by it would be protected, Minister for Sport John O'Donoghue said.
He said the residents had been engaged with through the IRFU and other means.
"At this point a new stadium with world-class facilities that looks magnificent and has been praised by leading environmentalists, such as Mr Frank McDonald, is far more preferable to a concrete jungle which might be the alternative were the stadium to move out of Lansdowne Road."
He said he would encourage residents to consider the situation very carefully. A planning application would, hopefully, be lodged by the end of the year.
Fine Gael's spokesman Jimmy Deenihan said, in the light of the recent fire on the northern terrace, the stadium was on borrowed time. In reality there was only one stand, the east, as the west stand and both terraces required substantial overhauls. Hence the urgency of sustaining momentum.
In the light of what had happened at Lansdowne Road last week, it might now be an opportune time to approach Croke Park to negotiate the possibility of holding future soccer home internationals there.
Mr O'Donoghue said the balance of the cost would be shared by the IRFU and the FAI. The State would contribute €191 million towards the cost of €365 million. "I am assured by both the FAI and the IRFU that they are confident and quite positive that they will be in positions to raise the necessary funds through advance selling of various premium and corporate seats."
