Beer production will be concentrated at the St James Gate brewery, which will see its capacity increased to 7m hectolitres.
Diageo’s brewing activities at Dundalk and Kilkenny will close in July 2013 and December 2013 respectively, subject to planning and construction timelines at St James’s Gate.
The move towards centralisation follows the group’s review into the sustainability of its brewing operations in Ireland.
David Gosnell, president of Diageo Global Supply, said: “The decision to consolidate to the St James’ Gate site is fundamental to delivering the competitiveness necessary for the long term sustainability of our brewing in Ireland.
“This is a significant investment and an expression of confidence by Diageo in our Irish operations.”
According to the Guinness owner, 300 construction jobs will be created during construction, which, subject to planning permission, will be underway in the first half of this year.
Richard Bruton, minister for jobs, enterprise and innovation, said: "This announcement represents a huge vote of confidence in the Irish economy by a world-leading company, creates very welcome construction jobs, and secures Diageo's brewing operations in Ireland for decades.
“High-tech manufacturing must be at the centre of our jobs recovery, and today's news that the next generation of Diageo's activities will take place at a brewing centre of excellence in Guinness's historic home in Dublin demonstrates what is possible."