Highlands and Islands Enterprise (HIE) will provide £1.7 million and the local authority Comhairle nan Eilean Siar (CnES) will add £1.5m to complete the project.

Led by CnES, the £18m transformation of the category-A listed building had been in danger of grinding to a halt because of £3.2m cash shortfall before HIE and the council came to the rescue.

The Lews Castle situated in Stornoway which has been closed to the public for around twenty years is being fully restored to provide an innovative museum, a state of the art archive for the Outer Hebrides and a unique hospitality venue.

A glass roofed courtyard links the restored Lews Castle to the new museum, archive and learning spaces. The museum has a strong Gaelic ethos with Gaelic led bilingual interpretation throughout the galleries. Permanent displays including six of the world famous Lewis Chessmen will be a highlight and opportunities for temporary or touring exhibitions will be provided within the special exhibitions gallery.

This third phase of the project will include building work to the upper floors of the castle. These works will secure the private sector operator to complete fit-out works and operate as high quality accommodation for the islands.

Gordon Macdonald, HIE’s senior development manager, said: “This is a very exciting project which promises to develop the potential of the Lews Castle as both a cultural and economic asset and will benefit the islands’ communities by creating employment, increasing tourism and further developing the Outer Hebrides as a world class destination.

“Along with our partners in the Comhairle, we are delighted to support this phase of the project as it takes another significant step forward. The new facilities will be a huge asset for the island community and a major attraction for visitors to the islands and we look forward to seeing Lews Castle return to its former glory.”

The Comhairle plans to open the new museum and provide public access to the restored ground floors of the Castle in October 2015.

CnES Leader, Cllr Angus Campbell, said: “I am delighted that the project has reached this stage and I would once again like to thank all our funding partners. This is very good news for the Western Isles and the castle will provide a unique hospitality venue and an enhanced, islands wide heritage service.”

Phases one and two have been funded by a combination of CnES, HIE, Heritage Lottery Fund, ERDF, Scottish Government and Historic Scotland. This third phase is being funded by CnES and HIE to ensure the building is ready for the private sector to invest in completing the fourth and final phase.

Carried out by Graham Construction, the conservation of the A-listed Lewis landmark has been led by Simpson & Brown Architects, while Malcolm Fraser Architects have overseen the new build extension connected to the castle by a long gallery and glass roofed courtyard –offering improved facilities including a café, shop and gallery space.