These large signs were put up as part of the Coast Watching Serrvice (CWS) founded in 1939 in response to the The Emergency, or Second World War. The words EIRE were spelled out in huge stones, embedded into concrete and whitewashed. Sometimes the number of the particular sign was also written in stones and the whole site enclosed in a rectangular stone border. They were constructed and looked after by the men who were responsible for the nearby lookout post.
The Eire marking at the end of the Sheep's Head was number 31 and was one of five signs built along the coast of Cork from 1939 onwards. Altogether 82 signs were construted, stretching from County Louth to County Donegal. They were designed to warn wartime shipping and aircraft that they were approaching neutral territory. The Sheep's Head markings are quite hard to spot but once your eyes acclimatise you can still make out the letters quite clearly.
Nearby by sites:
You have to leave the Sheep's Head Way at the circular marked helicopter landing area and scramble down towards the cliffs. It's a rugged and exhilarating spot but difficult to make out the letters clearly - as they would have been best seen from the air or the sea. Extreme care is needed as the cliffs are steep and the terrain slippery.
Edit: the rocks have recently been whitewashed and the letters are far more visible (2015).