Governor-General
He returned to considerable prominence in 1922 when, on the urging of the soon-to-be Irish Free State's Provisional Government of W. T. Cosgrave, the British government recommended to King George V that Healy be appointed the first 'Governor-General of the Irish Free State', a new office representative of the Crown created in the 1921 Anglo-Irish Treaty and introduced by a combination of the Constitution of the Irish Free State and Letters Patent from the King. The constitution was enacted in December 1922. Healy was the uncle of Kevin O'Higgins, the Vice-President of the Executive Council and Minister for Justice in the new Free State.
Initially, the Government of the Irish Free State under Cosgrave wished for Healy to reside in a new small residence, but, facing death threats from the IRA, he was moved as a temporary measure into the Viceregal Lodge, the former 'out of season' residence of the Lord Lieutenant, the former representative of the Crown until 1922.
Healy officially entered office as Governor-General on 6 December 1922. He never wore, certainly not in public in Ireland, the official ceremonial uniform of a Governor-General in the British Empire. At that time, in the 1920s, Healy was unique amongst viceregal representatives in the British Empire in this regard. Healy was also unique (along with his successor, James McNeill) amongst all the Governors-General in the British Empire in the 1920s in that he was never sworn in as a member of the Imperial Privy Council. Nor was he ever sworn into the Privy Council of Ireland, a body that ceased to exist in early December 1922. Thus, unusually for a Governor-General within the Empire, he never gained the prefix 'The Right Honourable' nor the post-nominals 'PC'.
Healy proved an able Governor-General, possessing a degree of political skill, deep political insight and contacts in Britain that the new Irish Government initially lacked, and had long recommended himself to the Catholic Hierarchy: all-round good credentials for this key symbolic and reconciling position at the centre of public life. He joked once that the government didn't advise him, he advised the government: a comment at a dinner for The Duke of York (the future King George VI) that led to public criticism. However, the waspish Healy still could not help courting further controversy, most notably in a public attack on the new Fianna Fáil and its leader, Éamon de Valera, which led to republican calls for his resignation.
Much of the contact between governments in London and Dublin went through Healy. He had access to all sensitive state papers, and received instructions from the British Government on the use of his powers to grant, withhold or refuse the Royal Assent to legislation enacted by the Oireachtas. For instance, Healy was instructed to reject any bill that abolished the Oath of Allegiance. However, neither this nor any other bill that he was secretly instructed to block were introduced during his time as Governor-General. That role of being the UK government's representative, and acting on its advice, was abandoned throughout the British Commonwealth in the mid-1920s as a result of an Imperial Conference decision, leaving him and his successors exclusively as the King's representative and nominal head of the Irish executive.
Concerning the Irish Boundary Commission (1924–25) which determined the border between the Irish Free State and Northern Ireland, Healy made clear his opinion on how the border should be determined: The requirement of the Treaty that the Boundary should be determined in accordance with the wishes of the inhabitants subject to the other conditions therein mentioned, renders it necessary that the wishes of the inhabitants first be ascertained.
During negotiations for the Anglo-Irish Treaty, Healy had been assured by Winston Churchill that large areas of Northern Ireland would be transferred to Irish Free State - Counties Tyrone and Fermanagh, south Armagh, south Down, along with the towns of Enniskillen, Londonderry and Newry (those transfers never occurred).
Healy seemed to believe that he had been awarded the Governor-Generalship for life. However, the Executive Council of the Irish Free State decided in 1927 that the term of office of Governors-General would be five years. As a result, he retired from the office and public life in January 1928. His wife had died the previous year. He published his extensive two-volume memoirs in 1928. Throughout his life he was formidable because he was ferociously quick-witted, because he was unworried by social or political convention, and because he knew no party discipline. Towards the end of his life he mellowed and became otherwise more diplomatic.
He died on 26 March 1931, aged 75, in Chapelizod, County Dublin, where he lived at his home in Glenaulin, and was buried in Glasnevin Cemetery.