The Isle of Harris Distillery, which is to be built at Tarbert, is one of five businesses sharing £2.4 million under a grant scheme targeting the food and drink sector.
Work is due to begin on the distillery, which is expected to create about 20 jobs, late this year. The funding amounts to more than a third of the total costs of the building work.
Chairman and founder Anderson Bakewell said the funding award recognised the long-term benefits that the distillery would bring to the people of Harris.
He said: “Everyone can look forward with real excitement to the prospect of an initiative which promotes the assets of the islands throughout the world and serves as a catalyst for economic development locally.”
Other firms to receive grant funding are Findlater’s Fine Foods, Linlithgow; Sandyford Abattoir, Paisley; Struan Apiaries, Conon Bridge, near Dingwall and TM Fresh Direct, Carfin.