Finance Secretary John Swinney made the announcement yesterday in a speech to the Institute of Directors Highland and Islands members in Fort William.
The money will be generated from the European Regional Development Fund and will be used to build a new college building in Portree.
The grant will also go towards improving the current facilities.
John Swinney said: "This investment will allow West Highland College UHI to go ahead with its ambitious expansion plans at Portree and the benefits of this will be felt throughout the wider area.
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"Jobs will be created during the construction process putting more money into the local economy and the new and upgraded buildings will give the community greater access to the quality further and higher education that it needs to help people achieve their ambitions.
"With courses in construction and tourism, the expanded college will also provide local businesses with the skilled workforce that they require for success."
Lydia Rohmer, Principal and Chief Executive commented: "We are delighted to receive this much needed support.
"Thanks to leadership and support from the Scottish Government, we are planning to create a significantly enhanced centre for further and higher education and enterprise in Portree on Skye, which will provide for over 300 learners, with an additional 60 full-time places from September 2013.
"The centre will contribute support to key local economic sectors in tourism and hospitality, construction, creative industries, and health and care services as well as business and IT - helping individuals in the West Highlands to get a job, get a better job and hopefully to get a career."
(IT)
