The wave farm at Siadar will have a 4MW capacity
One of the world's largest wave stations is to be constructed off the Isle of Lewis in the Western Isles.
The station will create up to 70 jobs and advance Scotland's bid to lead the world in renewable energy, First Minister Alex Salmond said.
Ministers have granted consent for an application by npower renewables to operate a wave farm with a 4MW capacity at Siadar.
It is one of the first marine energy projects to be approved in the UK.
The technology used is called "oscillating water column".
Ocean waves move air in and out of chambers in a breakwater, which in turn drives a turbine from Inverness-based Wavegen, known as the Wells turbine, to generate electricity.
Stephen Salter, a professor of engineering design at the University of Edinburgh and a leading expert on renewable energy said that wave power had the potential to provide 100kw of power for every metre of ocean -- amounting to a big conventional power station for every 10km of shoreline.
At 4mw of power the Lewis wave farm will be able to power around 1800 homes -- a thousand times less powerful than a conventional coal fired Drax power station.
Even so Prof Salter said he believed the Lewis project to be the largest wave farm in the world, adding: "It is still small but the longest journey starts with a single step."
First Minister Alex Salmond said: "Today's announcement is a significant step in Scotland's journey to become a world leader in renewables.
"The Siadar wave farm will be one of the largest consented wave electricity generating station in the world.
"It is the first commercial wave farm in Scotland and is starting with a capacity to power around 1,800 homes.
"Nationally, this development will further strengthen our sector and locally, it has the potential to create up to 70 jobs in the Western Isles.
"This is good news for the Western Isles and for Scotland but its long-term potential is global."
npower renewables' managing director Paul Cowling said: "Scotland has immense potential in marine energy and the opportunity to be a world leader in marine renewables.
"This consent is an important milestone in the development of wave power technology and is to be celebrated.
"However, commercial demonstration projects such as Siadar still face significant economic challenges."
Matthew Seed, chief executive officer of Wavegen said: "The Siadar Wave Energy Project will be a major step in the development of the wave energy industry in Scotland and worldwide.
"Wavegen's proven technology will now be employed at full commercial scale, paving the way for real cost efficiencies which will bring the cost of wave energy closer to that of more established technologies."