Inverness College UHI has been given the green light to invest nearly £51 million in a state-of-the-art campus 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 campus will provide considerable benefits for staff, its 8,500 students and the local economy.
"I am very pleased to be able to commit to providing up to £51 million in funding from the Scottish Funding Council to the project and await updates on its procurement and construction with interest."
Cabinet Secretary for Infrastructure and Capital Investment Alex Neil added: "This type of infrastructure investment boosts our economy, supports jobs and makes a real difference for local communities like Inverness.
"Delivering projects like this through the Non-Profit Distributing model means better value for taxpayers than PFI. This kind of innovative approach will form the basis of the Infrastructure Investment Plan for Scotland that I will publish next week."
Inverness College UHI Principal John Spencer said: "The new campus for 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.
"Planning the new campus at Beechwood has been challenging in this difficult financial period, but the Government's commitment and investment in the College will deliver huge benefits for decades to come."
Mark Batho, Chief Executive of the Scottish Funding Council, said: "This is very good news for future students as well as for the business and communities that benefit from the work of Inverness College.
"The development adds to a portfolio of Funding Council investments that has seen over £500 million spent since 2000 with new build or major improvements in estates at 23 colleges."
The Scottish Government's innovative Engage for Education site allows users to read blogs from Ministers, post comments and get involved in workshops on issues relating to education.
(GK)
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