The government is also planning votes to remove Ireland's anti-blasphemy law and to reduce the time couples must spend apart before divorcing.
Prime Minister Leo Varadkar has previously said the eighth amendment of the constitution, which makes abortion illegal unless there is a real and substantial risk to the life of the mother, was "too restrictive".
His government has decided Tuesday that a referendum -- which must be agreed by parliament -- should take place in May or June 2018, just before the pope visits in August to attend the World Meeting of Families.
Abortion has always been illegal in Ireland but was inserted into the constitution in 1983 following a referendum, in which 67 percent of voters were in favour and 33 percent against.
The eighth amendment recognises the equal right to life of the unborn child and the mother -- and a woman convicted of having an illegal termination faces 14 years in prison.
However, women are free to travel abroad for abortions and thousands do so every year, mainly to England.
Opinion polls in recent years have consistently indicated strong support for reform in Ireland, which remains largely Catholic but where scandals have dented the church's authority.
Thousands of people are expected in Dublin on Saturday for the annual "March for Choice", declaring: "We are ready for change."
"We need access to free, safe and legal abortion for all who need or want it. And we need it now," organisers said.
The Abortion Rights Campaign said it "cautiously" welcomed the announcement.
"It depends on the wording of the referendum," spokeswoman Linda Kavanagh told AFP, fearing that it could be watered down from broad access to abortion.
Meanwhile, Cora Sherlock, spokeswoman of the Pro-Life Campaign, told AFP: "If the eighth amendment were to be amended or repealed, we would inevitably end up with a situation similar to every other country which introduced abortion on 'restrictive' grounds but subsequently ended up with abortion on wide-ranging grounds."
