The scheme will see the derelict John O'Groats House Hotel extended and converted into holiday apartments. Meanwhile, 23 holiday chalets will be built on a nearby 3.8ha site. A second phase will comprise improvements to the harbour area and the creation of a visitor centre.
The scheme is a joint venture between site owner Heritage GB and Natural Retreats, whose managing director Matt Spence said it would revitalise the area and create much-needed jobs.
"John O'Groats is a worldfamous destination and being able to play a part in helping to restore it to prominence with the kind of development this location deserves is something we are incredibly proud to be involved with," Spence declared.
The applicants have been working closely with Highland Council and Highlands and Islands Enterprise on the project, which follows several previous failed attempts to revive the run-down attraction. It is hoped that work will start next year, with the complex opening in 2012.
"This is the culmination of 12 months of engagement with local stakeholders. It confirms our strong belief that close co-operation between private companies and the public sector is essential to deliver projects of this nature.
"It can also prove to be a huge boost to regional tourism, especially in the difficult current economic conditions," said Heritage GB chief executive Allan Leech.