The Merchants Quay Project CLG is the "preferred bidder" to operate a medically supervised injecting facility, according to the HSE.
Labour Senator Aodhán Ó Ríordáin has welcomed the confirmation by the HSE but highlighted that there is still "some distance to go" before a pilot facility opens.
Senator Ó Ríordáin said: "For over three years I have campaigned to see a medically supervised injecting facility opened in Dublin so today's announcement by the HSE is long overdue.
"I welcome the decision to appoint Merchants Quay CLG as the preferred bidder. It is over two years on since this approach was first approved by the Government and the process to date has been too dragged out.
"However, there is a still long way to go before such a facility can be opened, and it will also have to go through planning."
He added: "This pilot programme is essential for ensuring addicts have access to clean sterile injecting equipment alongside trained staff who can provide care in the event of an overdose as well as assistance, advice and support on access to rehabilitation and treatment.
"It will mean taking used drug paraphernalia off our streets and reducing the risk of HIV and Hepatitis infections.
"Essentially this project is about helping those with crippling addictions in a compassionate and safe way to aid them on a first step to recovery."