Agriculture Minister Charlie McConalogue went shopping in Dublin city centre hours ahead of a scheduled Covid-19 test that later came back positive.
The news has forced all cabinet members to restrict their movements pending test results that were due last night and this morning.
Ministers were told they were not considered close contacts, meaning they will be free to go about their business, provided they have returned a negative test.
A spokesman for Mr McConalogue said he had followed public health guidelines after his return from Brussels, where he was on government business.
The Donegal TD was spotted on South Anne Street, just off Grafton Street, at about lunchtime on Tuesday.
He was in the queue at Sheridan's Cheesemongers.
The minister also stopped to talk with Fine Gael TD Fergus O'Dowd, with both men wearing masks, on the same street.
He was shopping in the city centre a short time after the cabinet meeting in Dublin Castle, at which ministers signed off on plans to re-impose Level 5 restrictions in the coming days.
Mr McConalogue's spokesman said the Fianna Fáil TD had followed the rules for members of the Government who have returned from essential foreign travel.
The minister attended an EU agriculture meeting in Brussels last week.
He returned to Ireland on Thursday and was immediately tested and returned a negative result.
Under the protocols, ministers are tested again five days later.
Mr McConalogue underwent his second scheduled test at around 4pm on Tuesday. It returned a positive result yesterday morning.
Citing a government memo, his spokesman said Irish residents who travel overseas for essential purposes, including cabinet ministers, and restrict their movements apart from that purpose while overseas, are not advised to restrict their movements on their return to Ireland.
"Therefore, he didn't have to restrict his movements," the spokesman said.
"He followed the rules, he followed the guidelines, he was doing his confirmatory test a few days later and he was not required to restrict his movements in that time.
"There is no impropriety here and he was wearing a mask at all times yesterday [Tuesday]."
Mr McConalogue wore a mask throughout the cabinet meeting at Dublin Castle, which was socially distanced and lasted less than two hours.
After the positive test was confirmed, ministers were contacted by an official in the Department of the Taoiseach, and the National Ambulance Service was dispatched to carry out swabbing, with the results expected within hours.
Some ministers privately questioned why Mr McConalogue did not appear via video link at Tuesday's cabinet meeting, with one noting that Finance Minister Paschal Donohoe did so earlier this month following a foreign trip.
Mr McConalogue's spokesman said the rules were clear and there was no requirement for ministers to restrict their movements on return from essential travel abroad.
The minister is now self-isolating in Donegal and was not showing symptoms of the virus yesterday.