The Irish Aviation Authority is proposing to reduce the charges from €10.39 per passenger to €8.85 for 2027.
It will be up to airlines whether to pass on the reductions.
The IAA said it decided to cut the charges because the number of travellers going through the airport is now higher than expected.
The Government recently passed legislation which would see the cap on passengers going through Dublin Airport removed.
The IAA said higher passenger numbers meant the airport's fixed costs are spread across more passengers and the airport is benefiting from more commercial revenue from retail, food, drinks and car parking.
It also said the airport had delivered significantly less capital investment than was expected under the current pricing regime as projects were delayed partly due to planning challenges.
The IAA said it expected the price cap to remain below €9 for 2028 and 2029 but said it could increase to between €10 and €11 if large infrastructure projects have commenced construction.
But it added that if none were underway the price cap could fall below €8.
The IAA said it expected passenger traffic to grow at an average of 3.2% annually from 39.4 million next year to 44.5 million by 2031.
It said this would allow for collection of between €1.6 billion and €2 billion in revenues from airport charges.
Significant projects planned for the airport include 14 new aircraft parking stands, a new Pier 5 extending from Terminal 2, a new US preclearance facility, a larger check in hall at Terminal 2, road improvements and sustainability investments including solar power.
The daa, which runs the airport, criticised the decision and said it was "disappointed".
It added the draft determination risked undermining the progress which has been made to make Dublin "one of Europe's best-performing capital city airports".
"The proposed €1.54 reduction in the airport charge may appear small, but it has significant implications for Dublin Airport’s ability to continue investing in better facilities and services for passengers and airlines," the daa's deputy CEO Nick Cole said.
Eddie Wilson, CEO of Ryanair DAC, said the airline welcomed the draft determination and said if it was finalised the airline would add "up to 2 million more low-fare seats" and base three more aircraft in Dublin from summer 2027.
However, the airline criticised the daa's investment plans for "unnecessary gold-plated facilities which are not needed and add no significant passenger capacity at Dublin Airport."
Aer Lingus said it noted the publication of the IAA's decision, will now review the details and participate in the IAA's formal consultation process.