Mardan House in Killybegs is to be used for temporary emergency accomodation.
22 beds in the B&B, which has been lying idle for a number of years, will be made available for international protection applicants.
The contract with Mardan House has been signed for a period of one year.
It's also understood that families and couples will be among those moving in, with seven bedrooms being made available to them.
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Independent Donegal TD, Thomas Pringle, says that the imminent arrival of the refugees should not impact tourism in the area.
