The subsea link between Kintyre and Hunterston has been planned for a number of years and will provide 150MW of additional grid capacity for renewable energy projects.
It is part of wider plans to invest £5bn in the electricity network between 2013 and 2021 and will provide a significant boost to the Kintyre economy.
The decision to move ahead with the project follows positive feedback from the industry regulator, Ofgem.
Plans also include the construction of a new 13.5km power line between the new substation at Crossaig and the existing substation at Carradale, largely following the existing route and replacing the existing line of pylons.
The project will provide an alternative source of power from the mainland, increasing the resilience of the network in an area that suffered unprecendented damage caused by high winds and heavy snow earlier this year.
SHE Transmission will now finalise plans for construction and engage with communities to explain what can be expected during the project.
David Gardner, Director of Transmission, said: “The announcement from Ofgem signals another significant step in our plans to reinforce the transmission infrastructure throughout Scotland.
“Along with completion of key projects within our approved budget of £1.4bn, including good progress on Beauly Denny, this project demonstrates that we are gaining momentum on our capital expenditure programme which will connect significant amounts of renewable energy to the grid; contributing to energy security, economic growth and decarbonisation of electricity generation.”