Etihad is said to be interested in buying out Ryanair's stake in Aer Lingus.
The low cost airline currently holds a 30% share of Ireland's national carrier.
Aer Lingus are reportedly happy about the proposal by Etihad who already hold a 3% share in the airline.
According to online news service Bloomberg, the Middle East carrier is also in discussions to buy out the government's 25% holdings.