This is the first provision of its kind for students.
Leaving Cert students who suffer a bereavement during exams will now be entitled to take three days off from the exams themselves, and then sit alternative papers in July.
This year's Leaving Cert exams are due to start next week.
It is currently being run on a pilot basis, but was initially put into action after student Rhona Butler gave an emotional interview on Ryan Tubridy's radio show earlier this year.
During the interview, Butler told the story of her mother passing away, getting up the following morning for an exam and then sitting three more exams that week before her mother's funeral took place that Saturday.
Minister for Education Joe McHugh made the announcement about the new provisions on Friday, stating: "We have a duty to take reasonable measures to support young people who suffer loss at such an important time for them."
The new provision will allow students to take up three days off from exams, commencing from the death, up to and including the day of the funeral. The three days do not need to be consecutive.
Additionally, the scheme defines a close relative as: a parent or step-parent or legal guardian, or a sibling, or grandparent. It also encompasses the death of a son or daughter or spouse or partner.
