The hospital said a large number of confirmed or suspected virus cases required treatment, limiting beds.
Eight additional coronavirus-related deaths were reported in the Republic of Ireland, with its total now 2,344.
A further 6,888 positive results brought the number of cases during the pandemic to 147,613.
As of 14:00 on Sunday, there were 1,452 Covid-19 patients in the Republic's hospitals and 125 were in intensive care.
There were up to seven ambulances waiting outside Letterkenny University Hospital at 21:00 local time, reported RTÉ News.
Eleven further beds have since opened.
The Irish Nurses and Midwives Association (INMO) said it was "exceptionally concerned" about the situation.
On Sunday, County Donegal reported 196 cases of Covid-19 in the previous 24 hours.
Between 27 December to 9 January, there were 2,243 confirmed cases in the county.
Priority assessment
The hospital said the delays meant people could not be admitted to a dedicated Covid-19 zone.
Clinical teams assessed patients in the ambulances outside, it added, to ensure they were treated in order of priority.
A spokesperson said ambulances continued to be released during the evening.
The hospital apologised to the patients affected and acknowledged the efforts of staff.
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January 11, 2021 at 04:01PM
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Coronavirus: Hospital apology as patients wait in ambulances - BBC News
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