"SAS has decided to establish a new AOC (air operator certificate) in Ireland with operational bases in London and Spain," the airline said in a statement.
An AOC is a licence granted by a national aviation authority to an airline to operate from that country and also register aircraft there.
"The aim is for the new operations to be up and running from winter 2017/2018."
SAS pointed to intense price pressure and booming demand for leisure travel in Europe.
In order to secure its own competitiveness in the long term, "SAS is now taking a further step to reduce the cost differential to newly established competitors," it explained.
Low-cost carrier Norwegian has already set up a subsidiary in Ireland to operate its long-haul flights from there.
SAS is partially owned by the Danish, Norwegian and Swedish states. Sweden owns 17 percent of the airline, while Denmark owns 14 percent and Norway 11 percent.