RTÉ lyric fm developed from FM3 Classical Music, which began broadcasting in November 1984. FM3 broadcast classical music on the RTÉ Raidió na Gaeltachta network at breakfast time, lunchtime and in the evenings. The station was rarely marketed, except via promotions on RTÉ Radio 1, and had low listenership ratings. It was probably best known for occasionally simulcasting the stereo sound track of movies being shown on the RTÉ television channels prior to RTÉ's deployment of NICAM digital stereo.
As Raidió na Gaeltachta expanded broadcast hours FM3's service hours changed to 19:30 till 01:00 and 06:30 till 08:00. Eventually it stayed on air until breakfast time when RnaG came back on.
In 1999, RTÉ put in place an additional national FM transmitter network, and it was decided to separate FM3 from Radio na Gaeltachta, and expand its remit to include other types of minority music. The resulting station was Lyric FM (currently styled RTÉ lyric fm). It also moved from Dublin to Limerick as part of a policy of regionalisation. At the time of the station's launch, RTÉ lyric fm’s digital studios in Cornmarket Row, Limerick, were the most advanced in the country.
RTÉ lyric fm won PPI National Station of the Year for the second time in 2004.