The Chair of the Arts Council, Olive Braiden, said Ms O'Faolain had made a significant contribution to Irish creative writing and would be mourned and badly missed by the arts community.
"While Nuala was best known for her journalism, she was also a wonderful teacher and lecturer. At her evening lectures in University College Dublin, she inspired in hundreds of students a life-long love of literature and creative writing," Ms Braiden said.
The Director of the Arts Council, Mary Cloake, recalled Nuala O'Faolain's excellent work as a newspaperwoman and broadcaster.
"In her journalism, she often showed an exceptional sensitivity and responsiveness in describing the ways in which the arts can enrich our lives," Ms Cloake said.
Among other awards, Nuala O'Faolain won France's prestigious Prix Femina in 2006 for The Story of Chicago May, her novel about a notorious Irish thief and prostitute.