A £100 million plan to improve the economic growth of the Orkney, Shetland, and Outer Hebrides islands will include an emphasis on the energy transition and a green hydrogen hub.
The deal details plans for the UK and Scottish governments to spend £50 million each in the three island regions' future economic growth.
Plans for an Islands Centre for Net Zero, which will help the energy transition for all three island groups, was included in the Heads of Terms for the Islands Growth deal.
It is hoped that this would provide 300 people with long-term “green” employment on the islands.
The Outer Hebrides Energy Hub will also set the foundations for the generation of green hydrogen from onshore and offshore wind.
UK Government Minister for Scotland Iain Stewart said: "Today we have signed a transformational deal which will bring jobs, investment and innovation to communities across all three island areas.
"These exciting plans show the path to a fairer, more sustainable, more prosperous future as we build back better from the pandemic.
"The UK Government’s £50m investment will boost green jobs and innovation in: sustainable energy, health, tourism, food and drink, and decarbonisation."
Scottish Renewables senior policy manager Ben Miller said: "We know that Scotland's rural communities are best placed to harness our country's abundant renewable energy resources and all three of these remote island groups have already demonstrated ground-breaking low-carbon innovation.
"The £16.5m funding for the joint Islands Centre for Net Zero will not only help accelerate the islands transition to a zero-carbon energy system but also create new jobs and bring enormous investment to the local economy.
"Green hydrogen is set to play a key role in our future energy system and investment of up to £5m in the Shetland Clean Energy Project and £11m for the Outer Hebrides Energy Hub will help develop hydrogen production from the islands' wind and marine resources, reducing carbon emissions and providing opportunities for business development and skilled islands-based employment."