McGrath will earn more than 300,000 euros a year in the role and will benefit from a range of favourable allowances and expenses available to European Commissioners.
Deputy Prime Minister Micheal Martin recommended his constituency colleague’s name at a government summit.
The nomination is due to be formally approved tomorrow morning when ministers meet at Government House.
The Fianna Fáil leader’s decision to nominate his most senior minister is aimed at securing a coveted finance post in the European Commission.
But the move means another cabinet reshuffle is needed, just over two months after the ministry changes that accompanied Simon Harris’s appointment as prime minister.
It also means the government could face five by-elections early next year.
Today’s News in 90 Seconds – Monday, June 24th
Fianna Fáil’s deputy leader Jack Chambers is expected to become Finance Minister after his surprise promotion last week to the role of deputy first minister.
Housing Minister Darragh O’Brien has also been mentioned as a possible successor to McGrath, as has Enterprise Minister Dara Callery, but sources close to Mr O’Brien say he is unlikely to change jobs given the government’s end to the term and the importance of the department.
If appointed, Chambers is expected to see Callery promoted to cabinet, taking up the post vacated by the Fianna Fáil deputy leader.
In this scenario, Cavan and Monaghan councillor Niamh Smith could also be promoted to Mr Callary’s old position.
For months Michael McGrath has denied speculation he could be set for the highest-paying job in politics.
He will be the first Fianna Fáil politician to be appointed to the committee since Marie Jorgen-Quinn resigned 10 years ago.
Georgehan-Quinn was replaced by Fine Gael’s Phil Hogan, who was forced to resign from the coalition government midway through his second term for breaching Covid-19 rules, and Mairead McGuinness, a Fine Gael member of the European Parliament.
During the Government Plan negotiations, it was agreed that Fianna Fáil would have the power to decide who the Irish commissioner would be after the recent European Parliament elections.
McGrath was appointed Minister for Public Expenditure and Reform when the Fianna Fáil, Fine Gael and Green Party coalition government was formed.
The coalition partners have agreed that Ms McGrath will swap roles with Finance Minister Paschal Donoghue when the role of First Minister changes in December 2022.
There were also fears within Fine Gael that if Donoghue stepped down as Irish finance minister he would be forced to step down as Eurogroup chairman as well.
But an agreement was reached in Brussels which allowed McGrath to remain in his role as president while attending meetings as finance minister.
McGrath will receive a monthly salary of 25,900 euros as a commissioner and, as a father of seven, he will be entitled to family allowances as well as having his accommodation paid for in Brussels.
Commissioners also receive an entertainment allowance, and all airfare and accommodation costs are paid for by European taxpayers.
The new finance minister will be responsible for delivering the coalition government’s final budget before the next general election.
Last week First Minister Simon Harris called on Fine Gael MPs to hit back at suggestions that a general election would be called before the budget is announced.
The Fine Gael leader also called on party members to make suggestions regarding budget measures.
The new finance minister’s first job will be to deliver the summer economic statement, setting out how much money the government needs to spend on welfare increases and tax cuts.
