It will have a direct impact on about 300 schools - those with the most overcrowded classes. That amounts to about 10pc of all primary schools.
The PTR is a measure of all teachers allocated to a school, including resource teachers, and does not directly translate into class size, but, with more teachers, principals can create smaller classes.
Schools will be told to use the extra resources to prioritise smaller classes for infant pupils, where it is deemed to make the most difference.
Currently, average primary class sizes in Ireland are about 25, the second highest in the EU after the UK, and well ahead of the EU average of 20.
Overall, there will be an additional 1,280 teachers in primary and post-primary schools next year, another 1,091 special needs assistants and 10 more educational psychologists.
Some 545 of the extra teachers will be recruited to deal with an expected 8,000 growth in pupil numbers, across primary and post-primary level.
On top of that, 305 new posts will provide for the reduction in the primary PTR, there will be 230 new teachers in special classes and special schools, 100 new special education teachers and 100 new guidance counselling posts.
Fianna Fáil education spokesperson Thomas Byrne noted that a reduction in primary class sizes was a demand of the party's confidence and supply agreement with the Government, "which must be followed up by real and significant actions to further reduce pupil-teacher ratios to 23:1".
The Irish National Teachers' Organisation, the Board of Education of the Church of Ireland and Catholic Primary School Management Association welcomed the PTR cut.
However, school management bodies and teacher unions expressed disappointment that there was no improvement in the PTR at second-level, and that the Budget did not deliver on the Programme for Government commitment to increase funding for schools, at both levels, to help cover day-to-day running costs.
John Curtis, general secretary of the Joint Managerial Body, representing management in almost 400 secondary schools, said Ireland had a higher ratio of students to teaching staff than the European average, which warranted "attention in order to ensure the ongoing quality of the education".