The scheme involves converting the former police station in Port Ellen into six self-contained one bedroom and studio flats.
The project is being delivered by The Port Ellen Station which is an associated organisation of the Ian Mactaggart Trust, a charitable enterprise with close links to the inner Hebridean island.
It is anticipated the works will be complete, and the building ready for the first tenants, by the end of July.
Cllr Robin Currie said: "We have been working with the Trust to explore options to bring this important building back into use. I am delighted that we are able to support the development and that renovation works have now commenced. This really is an exciting project for Islay and will benefit local residents and improve the outlook of the area. It will also sustain the future of the building and bring wider economic and social benefits.
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"The police station building itself dates back to 1885 and has been on the Buildings at Risk register since 2010. Without the commitment from the Trust to take action the outcome of the site could have been very different."
Douglas Mackie, Chair of West Highland Housing Association, added: "It is great for our organisation to be associated with a project like this. The energy and drive from Sir John Mactaggart with assistance from Argyll and Bute Council demonstrates positive action to bring back to use a well-known property for housing is very exciting. West Highland are delighted to be involved with this scheme."
(LM)
