An article about the song on the U2 website explains Hunter's involvement:

[Simon] Carmody recalled that Robert Hunter, Grateful Dead lyricist, was a fan of Drew, and they were delighted that when they approached him with the idea he was up for being involved. They anticipated Hunter would come up with lyrics for Ronnie to sing - in fact he came back with a lyrical tribute to him. The Ballad of Ronnie Drew became a collaborative composition between Hunter, Edge, Carmody and Bono.