The announcement was made earlier this week by Ireland's Industrial Development Agency (IDA), which heralded the news as a "very significant consolidation of Ireland's high profile position as a successful location for substantial biotechnology global investments."
Merck has splashed out €200m to get it hands on the 65-acre IDA Business and Technology Park in Carlow, on which it plans to build its new facility.
The plant itself will be Ireland's first stand-alone human vaccine project, and will involve a formulation and sterile filling facilities alongside R&D operations to support recently launched vaccines and future projects.
According to the IDA, Merck also intends to tap the academic scene in Ireland to seek out opportunities in biologics.
The plant is due to be up and running by 2011, employing 170 people across production, engineering, R&D, quality control, management and administration.
Merck settled on the location after considering a number of sites worldwide, making this the company's third plant in the region.
The existing operations fall under the remit of Merck, Sharp & Dohme, with construction on a new R&D and manufacturing facility in Tipperary having commenced last month.
Merck is not alone in choosing to establish a number of sites in Ireland, with several pharma firms operating multiple sites in the region in response to considerable time and effort spent by the IDA and its counterparts to create an attractive environment for the sector.
Abbott, for example, operates seven sites in Ireland, Johnson & Johnson has six, Pfizer currently has five and Schering Plough and GlaxoSmithKline both have four.
Ireland has in fact become a real focal point for the industry, establishing itself as the most popular destination for development and manufacture outside the US, according to the IDA.
With considerable expertise, an attractive infrastructure and all-important tax breaks, the life sciences are the biggest source of foreign investment in Ireland, with the pharmaceutical and biotech industries bringing in the bulk of the €2.6bn the region saw in capital investment projects over 2006.