its future ownership of the Guinness brand and its Dublin brewery
by announcing a
£520 million investment package.
The plan involves upgrading the St James's
Gate site in Dublin, where Guinness has been brewed since the 1750s and is still made for the UK.
The package also includes building a
state-of-the art brewery
yet-to-be-named site near Dublin. When it opens in 2013 it will become Ireland's largest brewery, surpassing St James's Gate.
The new brewery will be mainly used for ale, lager and export brands.
Stout for the UK will continue to come out of St James's Gate.
Satellite breweries in Kilkenny and Dundalk will close when the new brewery comes on stream.
Diageo said last year that it was embarking on a review of the future of the Dublin site,
fuelling speculation that it and the Guinness brand could be sold.
Diageo said the review had identified "the optimum strategy to deliver the global competitiveness necessary for future growth and sustained success".
Chief executive Paul Walsh added: "This will be the single biggest capital investment made by Diageo in its supply infrastructure and will enhance the cost competitiveness of our global beer operations."