Sky's deal to broadcast Northern Ireland home football internationals will earn the Irish FA more than £10m over the next four years.
Irish FA president Jim Boyce has strongly defended the new deal
Previous rights holder BBC Northern Ireland has expressed "shock" at the news but the IFA has strongly defended its decision to sign the new deal.
"This is in the best interests of the IFA and Northern Ireland football," said IFA president Jim Boyce.
Highlights deals and away games remain available to other broadcasters.
The new deal will cover all Northern Ireland home games in the 2010 World Cup qualifiers and 2012 European Championship qualifiers plus home friendlies.
Sky has also committed to having live coverage of two Northern Ireland under-21 internationals plus five Carnegie League games every season.
IFA president Jim Boyce denied that money had been the sole consideration in the association's decision but added that "we have to realise that we are living in a commercial world".
"For this association to go where we all want it to go, money is a very vital ingredient," added the IFA president.
Without the IFA being sustainable, it is impossible to invest in the domestic game
IFA chief executive Howard Wells
The IFA's previous deal with the BBC was worth more than £2m and Boyce said that the new contract "is worth approximately five times more".
"A sensible person will realise that this is being done in the interests purely of the Irish Football Association but more importantly in the interests of football at all levels in Northern Ireland."
Irish FA chief executive Howard Wells said that discussions over the rights had been "ongoing for six to eight months" with a number of broadcasters.
BBC Northern Ireland Sport executive producer Shane Glynn said that the corporation had not been given an opportunity to "make a counter-bid" and that he had heard of the development from a third party late on Thursday evening.
However, the IFA chief said that "all providers and deliverers" had been given the opportunity to make their case in recent months.
"The deal is also important from the point of view of getting the target demographic right for a football fan," added Mr Wells.
"What Sky has shown over the years is that the audience which they have worked to produce, has given commercial opportunities for the organisations which they have worked with.
"The reinvestment into the local game is critical here."
We are disappointed at the timing of this announcement, given that we were due to meet with the IFA's representative next week
BBC NI head of sport Mike Edgar
The IFA chief said the deal would help the association's drive to become "a sustainable business"
"It's important that we recognise that without the IFA being sustainable, it is impossible to invest in the domestic game."
BBC Northern Ireland head of sport Mike Edgar said the corporation was "extremely disappointed" at the IFA's decision.
"BBC NI has enjoyed a good relationship with the IFA, and has always sought to put fans first through our coverage of all home internationals, and several away internationals, including friendlies - not only on TV but also on radio and online.
"This is alongside our weekly coverage of the Irish League Premier division on Saturday Sportsound, Final Score, the football phone-in, BBC Newsline and Season Ticket, and live TV broadcasting of the Irish Cup and CIS Cup finals.
"We have been extremely proud to have worked with and supported the NI football team - not only through its recent successes but also in the leaner days when support from other broadcasters was not forthcoming.
"We understand that football is now big business and that sports rights are in an increasingly competitive territory, but we are disappointed at the timing of this announcement, given that we were due to meet with the IFA's representative next week when the specifics of a formal offer were due to have been discussed."