Irish finance minister Michael Noonan said the group plans to buy â¬1.12 billion ($1.61 billion) in shares in the lender, which will help keep the institution out of a majority government ownership, the Wall Street Journal reports.
It means the amount of cash the government needs to provide for the bank - which was established in 1783 - will fall considerably, reducing the administration's stake from 36 per cent to between 15 per cent and 32 per cent.
In a statement, Mr Noonan noted: "This investment is tangible proof of growing international confidence in the future prospects of both Bank of Ireland and the Irish economy."
The government said it is keen to keep some of the Irish banking system private and has been liaising with would-be investors for a number of months.
By Tony Aynsley