The game, which is a bonus game for FAI Season Ticket holders, takes place in Aviva Stadium on Tuesday, March 28 at 19:45.
Quarter-finalists at UEFA EURO 2016, Iceland - who are placed 21st in the FIFA World Rankings - will make their fourth visit to Dublin in what will be the first meeting of the teams since September 1997.
The game will arrive four days after Martin O'Neill's team will have played Wales in their first FIFA 2018 World Cup Qualifier of 2017 - which will also be hosted at Aviva Stadium.
This is the second 'Three' International Friendly announced, so far, for 2017 as Ireland will take on Uruguay on June 4 and it will be offered to 2016/17 FAI Season Ticket holders as a bonus game.
With sales already surpassing the 30,000 mark for this game, supporters are advised to secure their tickets early to avoid disappointment.