ARIEL, which is due to launch in 2026, has been selected as ESA's next medium-class science mission.
Professor Tom Ray from the Dublin Institute for Advanced Studies (DIAS) is the Co-Principal Investigator on the project.
'It is wonderful news that ESA have selected ARIEL,' he said.
'At this stage we have discovered almost 4,000 planets around nearby stars but very little is known about them beyond their size and how far they are from their parent star.'
In total 15 ESA member states and NASA are involved in the mission which will last four years.
During that time it will observe 1,000 planets orbiting around distant stars.
It will also carry out the first large-scale survey of the chemistry of exoplanet atmospheres.
Some of the planets that ARIEL will examine could be in the so-called habitable zones of their stars.
But those behind the mission say its main focus will be on warm and hot planets in orbits close to their star.
'ARIEL will study a large number of exoplanets to give us a much better picture of what the atmospheres of these planets are like,' Professor Ray said.
'This will enable us to answer questions about how the chemistry of a planet is linked to its birth and evolution and may ultimately help us understand how planets with benign atmospheres like the Earth form.'
ARIEL will have a meter-class telescope primary mirror to collect visible and infrared light, as well as a spectrometer to extract the chemical signatures of gases, a photometer and guidance system.
University College London as primary leader of the project will provide hardware and manpower.
Ireland will also provide funding via the ESA's PRODEX programme.
'Our involvement provides great inspiration for the next generation, and reinforces to our graduates that Ireland is at the forefront of research,' said Dr Deirdre Coffey of UCD School of Physics who is ARIEL's National Contact in Ireland.