Butchers are now allowed to process pork and supply supermarkets but their doors will remain closed to the public.
There currently wasn't enough capacity to hold pigs on farms or carcasses in processing facilities which could create an animal welfare issue without this decision, said Agriculture Minister Damien O'Connor.
But the risk of spreading Covid-19 was too great if butchers were allowed to open to customers, he said.
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O'Connor said butchers were an essential part of the supply chain for pork and would now be able to process it for supply to supermarkets and other retailers which were already open.
"We need them to operating to ensure that pigs can continue to be processed and are not backing up on farms leading to animal welfare issues.
"The pork industry is domestically focused with limited export to the Pacific Islands so there aren't as many avenues to offload product into other markets."
The pork industry raised this issue with the Government.
Cabinet agreed that there were strong enough grounds for a change to be made to address specific concerns in relation to animal welfare, O'Connor said.
Any butchers who choose to operate would need to follow health guidelines for distancing in the workplace to ensure staff safety and prevent the spread of Covid-19, he said.