Canna, which sits in the Small Isles to the south of Skye, has a population of 15 with a long-term aim of pushing that up to 30.
The community is now appealing for donations to complete the funding jigsaw that will allow it to build three houses which will be affordable and cheap to heat.
Despite the aim for gradual population growth, there is no available empty houses on the island to draw more people to live in the location.
National Trust for Scotland, which has owned Canna for 40 years, has now released land needed for the development.
The project will cost £750,000 in total, with the the community to raise the final £200,000 required to build the homes, with construction costs up to 40 per cent higher on islands.
Geraldine Mackinnon, chair of the Isle of Canna Community Development Trust (IoCCDT), said: “The Isle of Canna Community may be small, but we are always up for any challenge that will help us create a sustainable future for our island.
"We have a positive track record with previous projects and hope everyone will come on board and help us make our community housing a reality.”
The trust will manage the homes and search for new tenants, with hopes construction will begin next spring.
Clea Warner, National Trust for Scotland (NTS) general manager for the Highlands and Islands, said: "Our charity is entirely supportive of this community initiative and congratulate the IoCCDT for the positive steps they have taken.
"It is in our mutual interest to see a thriving community on Canna. We are certain the approach taken here will lead to sustainable development that enables the island population to live in harmony with the precious natural beauty that surrounds them and to benefit from it through the opportunities that result.”
NTS handed control of regeneration and development to the community trust in 2017 after it was unable to increase the island population.
The charity was gifted the island by folklorist John Lorne Campbell in 1981, with restrictions surrounding the use of buildings and land.
The trust was set up in 2013 to push forward sustainable development on Canna and has since set up a community shop and moorings.
An all-tides road to the neighbouring island of Sanday now gives residents round-the-clock access with a renewable energy project also now up and running.
There are also plans to renovate Coroghon Barn, which dates from the late 18th century, to create a visitor centre which is expected to attract up to 15,000 people a year.
With the plans for the future will advanced, more people are needed on the island to help make them happen.
Records show Canna was home to some 300 people at its peak in 1807. Following the collapse of the kelp trade and the Clearances, the figure dipped to 102, with residents split between Canna and Sanday.
A the end of the 19th century, owner Donald MacNeil sold the island to Glaswegian shipbuilder Robert Thom, who invested in a church, a pier and a footbridge. Sold to John Lorne Campbell in the late 1930s, it was donated to NTS in 1981.