The campus is a joint venture by Highlands and Islands Enterprise (HIE) and Orkney Islands Council who have appointed Kirkwall-based R Clouston Limited as the main contractor.

Work will include refurbishing, updating and extending the Old Academy and former Stromness primary school buildings as well as improving roads, paths and landscaping.

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.

HIE is investing £4.65m in the campus project, including £1.48m of European Regional Development Fund money. Orkney Islands Council is investing £2m, including £0.5m of Scottish Government Regeneration Funding, in addition to transferring ownership of the Old Academy and former Stromness primary school to the partnership.

The Old Academy is already home to the European Marine Energy Centre, Heriot Watt University’s International Centre for Island Technology, environmental consultants Aquatera and number of other businesses.

The aim is to attract more academic institutions and businesses with an interest in carrying out research projects in an island setting. This could include research linked to Orkney’s energy resources, transport needs, culture and economy.

Graeme Harrison, HIE area manager in Orkney, said: “We are delighted to be awarding this substantial contract to create the research and innovation campus, and welcome the fact that a local firm has been successful in tendering for the work. This is a significant step in the project and for our future business and academic infrastructure, the impacts of which will be felt across Orkney.

“This significant investment will support the growth of existing businesses and the creation of new ones. Crucially, it will provide more opportunities to attract and retain young people looking to live, work and study in Orkney. We look forward to working with the contractor and with Orkney Islands Council in bringing this important development to fruition.”

Council leader James Stockan said: “The award of the construction contract is a key milestone in the development of the research and innovation campus and I am very pleased that an Orkney-based firm will be carrying out the work.

“This is a project of great significance for Stromness and our islands as a whole. It will result in a 21st century centre of excellence, creating new jobs and stimulating a broad range of research and business activity in Orkney.”

Work on the project is set to get underway during the week beginning March 26.