The Cathaoirleach of Donegal County Council says the €12.5m investment in Fort Dunree will help it reach its full potential.
Plans include the bringing back to life some of the buildings at the site as well as the refurbishment of the museum and the creation of new walkways.
The development of a funicular cable railway is also in the offing, making it one of the first in Ireland.
550 jobs are to be created throughout the building and construction works as well as 12 full time positions.
Councillor Rena Donaghey says it will be a huge boost not just for Donegal but the entire country: