It said "abuse" of that policy was contributing to flight delays, with people taking on bags up to three times the permissible size.
The Dublin-based carrier said it made the decision because flights are being delayed because of a lack of space in overhead lockers.
Non-priority boarders, on the other hand, will only be able to take one small carry-on bag; anything deemed too big or with wheels will be taken at the gate and put in the hold free of charge.
Only priority boarding customers will be allowed to bring two carry-on bags on the aircraft.
Ryanair said on Wednesday: "As too many customers are availing of Ryanair's improved 2 free carry-on bags service, and with high load factors (97% in August) there is not enough overhead cabin space for this volume of carry-on bags, which is causing boarding/flight delays".
The airline claims this is causing boarding and flight delays due to a large number of cabin bag offloads.
The changes will apply to all existing and future bookings.
Ryanair spokesman Kenny Jacobs said the reduced fees would cost the airline more than €50 million per year in reduced checked bag fees.
For example, a small Mulberry clipper bag, which is designed for weekend travel, measures 23 x 43cm x 19.5cm and would not qualify as a cabin bag under Ryanair's incoming policy.
They seemed like a distant memory after the company relaxed its strict rules on allowing more than one item of hand luggage, which meant that you could essentially carry on your small suitcase (rather than checking it in) as well as a second smaller bag, like a laptop or handbag.
The company's boss Michael O'Leary, who makes nearly £8,000 a day, this summer also told angry passengers to pay extra or quit "whinging" about being seated randomly on flights.
Another group of Brits was also turfed off a flight to Alicante after causing a drunker ruckus on the plane.
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