The Isle of Harris Distillery which is to be built at Tarbert has been awarded funding from the Food Processing, Marketing and Co-operation grant scheme.
It is one of five businesses to share the £2.391m total for this round.
Three other firms received £241,000 through the Marketing Development grant scheme.
20 jobs are expected to be created at the distillery, which is due to be built towards the end of the year.
Rural Affairs Secretary Richard Lochhead has been visiting the proposed site.
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He said: "Whisky is an iconic Scottish product which is loved around the world and has growing international sales. Already many rural and island communities around Scotland have reaped the economic benefits that a distillery can bring.
"I’m pleased that the Scottish government has been able to offer funding, amounting to over a third of the total costs of building the Isle of Harris Distillery, and it’s great to be here today to learn more about this exciting project.
"I am sure that, in time, Harris whisky will develop a worldwide reputation for quality in the same way as Harris Tweed has done. I look forward to enjoying a Harris dram in a few years time."
Chairman and Founder Anderson Bakewell said: "The award adds to the momentum which this project has generated and increases significantly the likelihood that this once-in-a-generation opportunity will not be squandered.
"Everyone in the islands 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."
(IT)
