Inverness College UHI has been given the green light to invest 50 million pounds in state-of-the-art educational facilities for the city.
Support from the Scottish Funding Council will bring together students and staff currently at the college's Longman and Midmills campuses to a new site at Beechwood, significantly modernising the institution's estate.
Education Secretary Michael Russell said: "The Scottish Government is consulting on wide-ranging plans to reform post-16 education, including encouraging greater collaboration and regional models of funding for colleges.
"As a focal point of the University of the Highlands and Islands, Inverness has a vital role to play in Further and Higher Education in the north of Scotland. The new College build will provide considerable benefits for staff, its 8,500 students and the local economy."
Ruaraidh MacNeil, Inverness Campus Project Manager at Highlands & Islands Enterprise (HIE), said: "We welcome this announcement, which confirms Inverness College will be the first occupier of the multi-stakeholder Inverness Campus. Through this major investment, the new College will become part of a transformational project which will bring significant benefit to the Highlands and Islands.
"Several other potential occupiers are already waiting in the wings and we will be marketing the Inverness Campus in the coming years as one of Scotland's prime locations for a range of high quality businesses and other organizations"
Inverness College UHI Principal John Spencer said: "Inverness College UHI will have a big impact, providing excellent opportunities for future generations of students and a boost to the development of the University of the Highlands and Islands as well as the city and region."
The development adds to a portfolio of Funding Council investments that has seen over £500 million pounds spent since 2000 with new build or major improvements in estates at 23 colleges.