AIB is buying Goodbody stockbrokers for 138 million euro.
Goodbody, which is 51% owned by Killorglin-based FEXCO, manages assets of around 8 billion euro and employs 300 people in offices across Ireland and the UK.
It will remain as a separately regulated entity with its own brand and board.
AIB will continue to adhere to the Government's pay restrictions, with separate remuneration structures in place for Goodbody.
Finance Minister Pascal Donohoe says it is a positive development for the economy: