Tougher measures will result in an on-the-spot fine of 60 ($96) and three penalty points for anyone caught texting while driving.
Those who refuse to pay face the prospect of being hit with fines of up to 1000.
The law currently says motorists cannot hold a phone while driving, but is less clear on the issue of sending a text while a phone is in a cradle.
A spokesman for the Department of Transport said: "Texting while driving has become increasingly common, and Mr Varadkar has spoken of this danger on several occasions."
New regulations will be issued next year after the Road Traffic Bill 2013 -- which has increased penalty points for certain offences -- is enacted.
The regulations will specifically ban texting while driving, whether or not the phone is being held. The offence will be the same as holding a phone while driving, which attracts a fine of 60 if paid within 28 days, rising to 90, and three penalty points.
If the fine is unpaid, the motorist can be taken to court, where a maximum penalty of 1000 for a first offence can be imposed, rising to a maximum 2000 and/or three months in prison for a third or subsequent offence within a 12-month period. Five penalty points can also be added to a driver's licence.
The changes result from concerns that drivers who use hands-free devices access the keypad of their phones to text or access information while driving.
Voice-activated texting will not be subject to the new rules.
Road safety experts say drivers are four times more likely to crash while on the phone, and that driver distraction plays a role in up to 30 per cent of all road collisions.
-Irish Independent