The Irish have been looking for a new head coach after the departure of Declan Kidney in early April, who was relieved of his duties after five years in the job following a disappointing Six Nations campaign.
Schmidt's name was immediately thrown into the mix despite the fact that he signed a one-year contract extension at Leinster last October which takes him to the end of the 2013-14 season.
The New Zealander had worked with Bay of Plenty and Auckland Blues back in his homeland before a three-year spell at French club Clermont Auvergne.
He arrived in Leinster in 2010 but the former school teacher will now cut short his extended stay in the province to take what he described as "one of the biggest jobs in world rugby."
But he still has work to do with Leinster as they are only one game away from clinching a third European title in three seasons after Saturday's Amlin Challenge Cup semi-final win over Biarritz.
Schmidt is expected to pen a three-year deal with the Irish RFU, which will take him through to the end of the 2015-16 season.