A 17% fall in cigarette sales is mainly due to the ban on smoking in workplaces, according to the government in the Irish Republic.
Since the end of March, smoking has been illegal in workplaces, including pubs and restaurants.
The Irish Republic was the first country in the world to introduce such a nationwide ban.
The policy has also meant a fall in tax revenues, the Department of Finance revealed ahead of budget day next week.
Finance Minister Brian Cowen said government income from tobacco taxes would be 128m euros (11%) lower than original forecasts for 2004.
'Brave'
Mr Cowen said the 17.6% fall in sales was clear evidence that the "brave" smoking ban was a good public health initiative.
Even before the policy was introduced, cigarette sales in 2003 fell by 10.2%.
Dr Luke Clancy, Dublin spokesman for campaign group ASH, insisted that the most important anti-smoking measure was not the workplace ban but price increases.
"If Minister Cowen does not put up the price of cigarettes (in the budget), the dividend from the workplace ban might be lost," he said.
"Price is the single most potent weapon."
Dr Clancy said he had expected a number of consequences before the ban was introduced.
"People would smoke less, because there were fewer opportunities; people would give up smoking, realising that it was bad and inconvenient, and probably more importantly, that many young people who only smoke in pubs would not begin to smoke," he said.
If customers are caught smoking in pubs, restaurants and other enclosed workplaces in the Republic, proprietors face fines of up to £2,000.
Its smoking ban has sparked debate as to whether Northern Ireland should follow suit.
Earlier this month, the Scottish Executive decided smoking should be banned in enclosed public places.
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