Fife-based distiller, John Fergus & Co Ltd, confirmed work on the project had started at its new Lowland malt facility, known as InchDairnie.
To mark the beginning of construction work, a sod cutting ceremony was held last week.
The new facility, located at Whitecraigs Road, Glenrothes, has been named after the former estate where it is being constructed. Around £7m is being invested in the project.
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It is expected to open by August 2015.
Glenrothes Area Committee Chair, Councillor Altany Craik, said: "It's great news that work has now begun on this very exciting development for the town. As well as watching the new distillery take shape over the coming months, I'm sure the local community will also look forward to new jobs for the area too."
Ian Palmer, Managing Director of the distillery, added: "We're delighted that work has begun on our new distillery. The development includes up to nine maturation warehouses with a capacity to hold 200,000 maturing barrels.
"Funding for the project has been sourced from private investors and the company's management and the project is also being supported by grants from the Scottish Executive and Scottish Enterprise."
(JP/CD)
