The separation of Shannon Airport from Dublin Airport Authority (DAA) could create up to 850  jobs, the government announced on Monday.

From December 31st, the southwest airport will become an independent facility when it separates from Dublin Airport Authority (DAA), leaving the Dublin airport authority saddled with €100 million ($130 million) worth of debt.

Shannon airport will be merged with the restructured Shannon Development to form a new, publicly-owned, commercial entity from next year on.

Transport Minister Leo Varadkarand Enterprise Minister Richard Bruton said the merger would create 850 jobs from a proposed international aviation services centre (IASC).

The Chairman of the Aviation Business Development Task Force, Rose Hynes, welcomed the announcement.

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“This is the beginning of a new era for Shannon Airport.   December 31st 2012 has now been set as the date for the separation of Shannon. This will be followed by the second phase of the process, the merging of the Airport with activities of a restructured Shannon Development.

“The immediate focus of the separated Shannon Airport will be the growth of passenger numbers but the future for Shannon will also involve the development of innovative new business streams, with strong job creation potential.

“We have spent the past five months working towards separation.  The process has involved discussions, many of which are at an advanced stage, with airline partners and industry, both of which are committed to investing in Shannon pending separation.  We now look forward to advancing these solid commitments and creating a sustainable future for the benefit of Shannon Airport, its staff, customers and the region.”

Shannon airport was officially opened in 1945. Over 1.6million passengers travelled through the airport in 2011.