The 3.75-acre campus will support the growth of existing research and innovation activity and the expansion of companies in Orkney’s world-leading marine renewables, energy and low carbon sector. It will also attract additional research activities to Orkney, both from the commercial and academic worlds.

Highlands and Islands Enterprise (HIE) has approved up to £5.15m for the project, including £1.48m of European Regional Development Fund (ERDF) money administered by HIE, while Orkney Islands Council is to provide £1.5m.

The local authority will also transfer the ownership of the Old Academy and former Stromness primary school to the partnership.

Under the plans, the two adjoining buildings will be refurbished, updated and extended to create the campus.

Graeme Harrison, HIE area manager in Orkney, said: “This is a huge investment in Orkney’s future business and academic infrastructure, the impacts of which will be felt across Orkney.

“It will support the growth of existing businesses and the creation of new enterprises.

“Crucially, it will provide more opportunities to attract and retain young people looking to live, work and study in the islands.”

Economy secretary Keith Brown added: “I’m sure that this investment will increase the competitiveness of Orkney in the marine renewables sector, encourage business diversification, growth, inward investment and foster international partnerships.”

A planning application for the project is expected in due course with work to create the Orkney Research and Innovation Campus due to begin on site before the end of 2017.