National Grid and ScottishPower have awarded a £1 billion contract to Siemens and cable manufacturer Prysmian for construction of the first sub-sea electricity link between Scotland and England.
The 261-mile line will run from Hunterston in Ayrshire to a point on the Wirral peninsula and will have a 2200 MW capacity.
The new link will enable large volumes offshore wind and other renewable energy generation to be transferred from Scotland to England.
The firms said it will be the longest 2200 MW capacity high voltage direct current (HVDC) cable in the world.It will also be the first sub-sea link to use a direct current voltage level of 600 kV, which aims to increase the link's capacity while allowing lower transmission losses.
It is planned to be fully operational by 2016.
"This link will have a vital role to play in meeting both countries’ energy needs and helping to address the problem of climate change,” said National Grid executive director Nick Winser.
"We are investing in an innovative solution using the most advanced technology. As a result, the benefits for consumers and electricity generators in being able to transport power in the most efficient way will be felt for years to come."
Director of WWF Scotland, Dr Richard Dixon, also welcomed the news., "If Scotland and other countries are to maximise the opportunities that renewable energy provides, then improving electricity links between nations is a vital piece of the jigsaw," he said.
"With our huge natural advantages, Scotland can be a leading supplier of clean, green electricity in Europe.
"This announcement is another vote of confidence and confirms Scotland as the place to be when it comes to developing wind, wave and tidal power."