The arrangement will reportedly restore the Common Travel Area, a special zone between Ireland, the UK, Isle of Man and Channel Islands.
It is understood that after Brexit, EU nationals will be able to go to Ireland on holiday and not show passports to get into the UK.
However, they will not be allowed to work in the UK without a work permit.
The Government will also reportedly develop a trusted trader scheme which will allow goods to be carried north and south from established firms.
Irish prime minister Leo Varadkar is expected to be will be a key ally for Britain during Brexit negotiations talks, yet he has expressed frustration at May’s failure to ensure there is no return to the “hard” border between the Northern Ireland and the Republic.
Every year an estimated 20,000 people come to work on the British mainland from the Irish Republic.
A source at the Department for Exiting the EU said: “We’ve been crystal clear that issues around our withdrawal and our future partnership are inextricably linked. The negotiations so far have reinforced that.”
Papers published by the Government from next week, which lay the ground for the next round of talks, will cover Northern Ireland, availability of goods for the EU and UK and access to official documents post Brexit.
A second batch, to be released before the October meeting of the European Council in Brussels will look at future partnership arrangements such as UK proposals for a customs arrangement with the EU.
Speaking about the publication of the papers, Brexit Secretary David Davis said: “This is an important next step in delivering on last summer’s referendum and getting on with task set to us by the British public.”
David Davis will next week enter into a third round of talks with Michel Barnier, the EU’s chief negotiator in Brussels.
Mr Barnier is reported to have said that Britain, in the first two rounds of negotiations, has failed to produce clarity on the Irish border, rights of EU citizens in the UK, and Britain’s “divorce bill”.