The jobs were due to be set up as part of h deployment of more than 10,000 civil servants out of Dublin.
The 258 jobs were due to be set up within the Department of Social Protection in Donegal Town before 2007.
Minister for Expenditure and Public Reform Brendan Howlin is today expected to admit the plan has now been shelved.
The Government spent a whopping €289 million on the plan.
Donegal is one of few counties who did benefit from the decentralisation plan.
At least 102 jobs were relocated from Dublin to Buncrana as part of a restructuring of the Department of Social Protection.