It is not clear how much of the €3bn in EU levies the new dairy levy will raise, but the government hopes that this will help it make up for lost revenue from levies in other sectors.
A dairy lobby group has called for the government to lift the levy to €2,500, which is the level it will pay to dairy producers and processors.
The levy will now be collected in instalments over three years.
The government hopes to raise the money to offset the costs of the levies, which will raise about €10bn by 2019-20, mainly through a levy on milk sales, the government said.
The dairy industry has been one of the key drivers of the European economy for decades, with prices at the peak of the dairy boom in 2014.
The average price of a litre of milk rose by over 8 per cent to €1.75 in the last year of the crisis, according to Euromonitor.
A further 3 per cent rise was recorded in 2016.