R&B Distillers has proposed turning Borodale House, a derelict Victorian hotel, into a distillery and visitor centre.
The building work is scheduled to begin in April this year and the production of whisky next year.
The distillery would be one of the largest employers on an island with a population of about 170 people.

And in Australia, the wearing of so-called activewear - whether or not you are doing sport - has become something of a phenomenon.
A music video gently poking fun at the use of the clothing for such high-octane activity as drinking coffee or going shopping became a viral online hit in 2015.
And now activewear trends are the focus of academic research, which suggests sports brands have been slow to recognise the needs of female customers.
A study by Victoria University in Australia says a desire to exercise "anywhere and anytime" is driving growth, as more and more women try to fit informal exercise into a busy schedule.
According to Prof Clare Hanlon, the industry took a long time to realise it needed to evolve. Now it is successfully cashing in.
"Finally companies are understanding the effects physical activity trends have on their industry and are listening to female customers on what they need," she says.
That includes rethinking how exercise clothes are sold, and improving things like store changing rooms.
"Companies have realised sport isn't just for guys," says Shannon Walker from the Australian Sporting Goods Association (ASGA), which commissioned the research.
He says brands have had to offer a better shopping experience to women.
"They don't want to go to the old-fashioned sports store set up to cater for men. They want a retail experience set up for their needs."
In Australia, activewear sales are expected to grow by more than 20% between 2015-20, with a large proportion of goods sold online.
Julie Stevanja started internet retailer Stylerunner in 2012, after becoming frustrated at the lack of choice available in the shops.
It soon became one of the fastest growing companies in Australia, and her sights are now set on expanding the business in Asia.
"There's been a huge shift to wellness," Ms Stevanja said during a visit to her Sydney warehouse.
"Everyone wants to be healthier and look better. They go hand in hand."
She also believes "enclothed cognition" - the idea that clothes help determine a person's behaviour - may have had a role in the popularity of activewear.
"I think if you are in your activewear at the weekend, you're probably more likely to buy a green juice or a smoothie than you are to have a milkshake," she says.
"People want to make healthier lifestyle choices. Sometimes the first step is actually associating with it, wearing something that makes you feel healthier."
Prof Hanlon from Victoria University agrees that the simple act of wearing activewear may help people feel they can become healthier.
"The research we've conducted... shows females believe activewear facilitates physical activity and good health," she says.
The next step for the research team will be a national survey to understand what determines how customers choose their garments, and what language brands can use to entice them.
Highland Council has approved plans for the Isle of Raasay's first whisky distillery.
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Bright tights and Lycra tops are a hallmark of an industry worth $270bn (Â£220bn) worldwide.