The Prime Minister hopes the deal will please Irish Taoiseach Leo Varadkar and make him a key ally during the next 20 months of tough negotiations.
Mr Varadkar has expressed frustration at the failure of Britain’s negotiating team to ensure there will be no return to a ‘hard’ border between Northern Ireland and the Republic so far.
Theresa May will offer free movement into the UK for Irish citizens after Brexit, along with ‘light touch’ customs controls on good moving across the border
The proposals would also include ‘light touch’ customs monitoring using CCTV cameras and number plate recognition technology.
The news was reported by the Sunday Telegraph, which cited an unnamed source in the Brexit department.
The paper said Irish citizens would be able to work freely in the UK, and British citizens would work freely in Ireland.
Citizens of other EU countries could access the UK over the Irish border but would not be able to work in Britain without a work permit.
A British paper focused on ‘issues unique to Northern Ireland and Ireland’ is expected ahead of the next round of negotiations.
Separate papers would also address ‘Continuity in the availability of goods for the EU and the UK’ and ‘Confidentiality and access to official documents’, the Brexit department said.
The proposal emerged after Chancellor Philip Hammond and International Trade Secretary Liam Fox issued a joint statement on Brexit after weeks of infighting
Meanwhile Brexit minister David Davis said he wants talks to move on to setting out details of Britain’s future relationship with the EU.
‘We need to get on with negotiating the bigger issues around our future partnership to ensure we get a deal that delivers a strong UK and EU,’ Mr Davis said.
His call came as finance minister Philip Hammond and trade minister Liam Fox presented a united front over a post-Brexit transition period.
The Chancellor and International Trade Secretary agreed that there should be a time-limited transition period, and that it would not lead to ‘backdoor’ of Britain staying in the EU, putting an end to months of infighting in Mrs May’s cabinet.