A 28-acre site, two miles north of Cairnryan, has been chosen to locate the facility which will be constructed to accommodate a mix of travel and freight customers all year round.

The investment also includes the addition of two large modern ferries when the port becomes fully operational on its Irish Sea service to Belfast Port.

Construction work at the new port is anticipated to take approximately 20 months, creating over 900 jobs, and will be completed by autumn 2011. A Harbour Empowerment Order (HEO) to allow the creation of the new port has just been approved by the Scottish Parliament.

The new port facility represents the first in a number of projects across Scotland which have been assigned National Project status by the Scottish Government and will half the time it currently takes to turn vessels around.

 "Today is a historic day for the people of Scotland and indeed Northern Ireland. The investment we have announced will provide Scotland with a first class port facility which underlines and enhances the port's prominence as the third largest gateway in the UK," said Dan Sten Olsson, Chairman of Stena Line, speaking at the announcement.

"The link between Scotland and Northern Ireland provides a huge number of benefits for both countries. Tourism and freight business between Scotland and Northern Ireland has seen significant growth in recent years and despite the current difficult trading conditions, we are confident that an investment of this magnitude will pay dividends over the medium to long term."

Scottish First Minister Alex Salmond said: "This new development will safeguard and create 1,400 jobs and trigger significant investment in Dumfries and Galloway. I am delighted to welcome the decision to approve this project and Stena Line's commitment and continuing contribution to the Scottish economy. The relocation of the port to the new Loch Ryan Port will also aid tourism with faster ferry crossings between Scotland and Northern Ireland and help the regeneration of Stranraer as a major marine leisure area. This is a significant day for transport and investment in Scotland, and today's announcements highlight the Scottish Government's continued commitment to working with investors to support jobs and the economy and to keep Scotland moving."

In 2008, Stena Line opened a new £37m port facility in Belfast harbour, which First Minister Salmond attended. Stena Line is the largest ferry operator on the Irish Sea offering the biggest fleet and route choice between Britain and Ireland. Routes between Britain and Ireland for travel and freight customers include Stranraer -Belfast, Fleetwood-Larne, Holyhead-Dun Laoghaire/Dublin Port and Fishguard-Rosslare.