The Kirn Primary School development is part of the local authority's new schools programme.
The new Campbeltown Grammar, Oban High School and Kirn Primary school are being delivered in partnership with hub North Scotland and the Scottish Futures Trust through the Scottish Government's Schools for the Future Programme.
The project will include retaining and refurbishing Kirn's 1881 Victorian building, while all remaining school buildings will be demolished. A new two-storey building will be developed, containing all primary classrooms as well as a library, dining hall and sports hall.
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The facility is designed for 320 pupils as well as having 30 early years spaces.
The council's Executive Director for Customer Services said: "Obviously we are very pleased to have reached this key stage in our new schools programme, with the contract for another school completed.
"The initiative is based on building high quality schools which will best serve our communities, delivering the Curriculum for Excellence and providing facilities for community use. The council is committed to building new, modern schools which will ensure a positive learning environment for our pupils.
"We are delighted to be moving into the construction phase, which will see this fabulous new primary school and early years facility completed towards the end of 2017."
Angus Macfarlane, chief executive of hub North Scotland, added: "This is an important milestone for the development of a new primary school in Kirn and hub North Scotland is delighted to be involved in helping drive this project forward to fruition."
(LM/JP)
