Demolition work is set to get underway on the first stage on the Knab redevelopment project next week.
The SIC said Shetland contractor Tulloch Developments would be starting the work at the old Anderson High School site in Lerwick.
The initial phase will focus on separating the existing buildings by removing links and extension.
It marks the first stage of an ambitious 10-year project, which will see the construction of new low-carbon housing and the redevelopment of several existing buildings.
It is also set to include recreational resources, business space and a creative industries hub.
Phase two of the demolition work – to demolish all unwanted buildings on the site – is expected to begin in the second half of 2021, and take up to a year to complete.
Neil Grant, director of development services at the SIC said: “It’s tremendous to see work beginning on the ground for this project. A lot of planning is already underway to redevelop the site, and we’re keeping local residents and the Lerwick Community Council up to date as the work progresses.
“Our aim is to create a site which blends affordable housing with dynamic community amenities, with innovation, sustainability, carbon reduction and community involvement at its heart, and we’re looking forward to working with our partners and the community as the work progresses.”
Mr Grant and Robert Sinclair, executive manager of assets at the SIC, gave an update on the project to Lerwick Community Council last night (Monday).
The project has already secured £9.1m in Islands Deal funding, with financial decisions on the total project yet to be decided.