The Lisdoonvarna asylum centre is being reserved for single women and families.
Thirty people arrived in the Co Clare town yesterday with an estimated total of 115 to arrive in the coming months.
The contract is for a fixed term for one year, according to the Department of Justice and the Reception and Integration Agency.
97% of local residents voted against the contract as they feel the residents will not be accommodated properly in the town, with limited resources. The centre is at the King Thomond Hotel outside Lisdoonvarna.
Local resident Ciaran O'Halloran said they were concerned by the issue of direct provision and what that means. He said: "We expect a family to live in one room...I just find it absolutely incredible," he said. "It pretty much is a jail sentence."
Earlier, Fianna Fáil TD for Clare, Timmy Dooley said: "Towards the end of last week, a number of individuals from outside of the area - my understanding is that they came from Dublin - went to Lisdoonvarna and started to distribute anti-immigrant, anti-migration literature... the kind of sentiments that are generally associated with far-right groups.
"That's unfortunate, because the people of Lisdoonvarna are anything but unwelcoming to anybody who comes to their town."
Deputy Dooley acknowledged that locals have "rightly raised concerns" about the suitability of the location and the numbers of asylum seekers coming to a village with a population of only a few hundred people.