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The Torabhaig Distillery will cost more than £5 million and employ around eight people, according to the company behind the newly-unveiled plans.
The distillery, a subsidiary of Mossburn Distillers Ltd, is to be built within a listed early 19th century farm steading at Torabhaig on the island's south-east coast.
Planning consent has been granted for the project and construction work is expected to begin in early summer, the firm said. Bosses hope the first new spirit will flow from the distillery by the end of next year.
Plans for Torabhaig are being drawn up by Edinburgh architects Simpson and Brown and the project is expected to include visitor facilities.
Neil Mathieson, chief executive of Mossburn Distillers, said: "Skye is renowned all over the world for its natural beauty and cultural heritage and we believe that Torabhaig will be a valuable contribution both to whisky distilling on Skye and to the island's continuing attraction to international visitors.
"We have a wonderful property in a beautiful setting looking over the Sound of Sleat to Knoydart. It's a perfect location for a small, traditional distillery and we look forward to working with the local community to bring our plans to life."
Currently Talisker Distillery, in the village of Carbost, is the only distillery on the Isle of Skye.
