The singer had just performed his hit single Humble and Kind when he sat down near his keyboard player, then slumped to his knees as he walked off stage.
McGraw's wife, singer Faith Hill, later came out to tell the audience he could not continue with the performance.
"He's been super dehydrated," she said. "I apologise, but I made the decision that he cannot come back out on stage."
After the audience chanted "We love Tim", Hill sang an a capella rendition of What A Friend We Have in Jesus, before the lights came up and the audience was ushered out.
McGraw, 50, was approaching the end of his set when he was taken ill at around 22:45 on Sunday night.
Audience member Del Crooks told the BBC the star's collapse "was a bit of a shock".
"I thought he was taking in the applause while sitting down after singing Humble and Kind," he said.
"But when a spotlight was switched on him, he was slumped on his knees on the left hand side of the stage. The light was quickly turned off and you could see his crew helping him off - and the band ran over as well.
"It was about another 20 minutes before Faith Hill came out to say the show was ending early."
The gig, at Dublin's 3 Arena was the final date of a three-day, three-city tour of the UK and Ireland, as part of the Country to Country festival.
McGraw and Hill were co-headliners, and had played in London on Friday night, then in Glasgow on Saturday.
Hill said the whole crew had been left "a little bit dehydrated" from "travelling so much".
A spokesman for McGraw said the star "was attended to by local medical staff on-site and will be fine".
"He and Faith thank everyone for their love and support and look forward to seeing their Irish fans again soon."
Recently, McGraw made headlines as being one of the few mainstream country artists to voice support for gun control.
On 3 March, he praised the US sporting goods store Dick's, after it raised the minimum age for anyone buying guns or ammunition to 21 years.
"Thank you @Dicks for taking a stand to promote a meaningful discussion for the safety of our kids!" McGraw wrote on Twitter, tagging other major retailers including Walmart, Kroger and LL Bean.
Those outlets later followed Dick's lead.