The project will provide housing for health staff and students

Communities Scotland, a Scottish Executive agency, put together the financial package.

The Bayhead Bridge Centre in Stornoway will provide housing for health workers, students attending Lews Castle College and young people.

Lack of funds had threatened to scupper the plan to convert the rundown community centre into accommodation.

An organisation called the Bridge Group is spearheading the project, which also involves Western Isles Council (Comhairle nan Eilean Siar).

'Unique project'

Donald John McSween, chairman of the Bridge Group, said he was delighted with the new funding.

He added: "The Bayhead Bridge Centre is a landmark community project combining a range of community facilities and achieving synergy for a number of organisations on one site."

Johann Lamont, deputy communities minister, said: "This is a unique project, tailored to the needs of Stornoway and the island communities."