The facility could generate up to 1000 MW of electricity – enough to supply the national grid with 1% of its needs and the government with a much needed push towards its target of providing 10% of the UK's power supply from renewable sources by 2010.
The scheme is currently the subject of a feasibility study by Amec, which it is due to complete in 12-18 months.
An Amec spokesperson said: "The whole thing is fairly fluid until the feasibility study is complete, but [the project] is scheduled to contribute to the national grid by 2007."
Up to 150 local workers could be involved in the construction phase of the project, which will make use of a mothballed manufacturing plant on the island.
Amec said it was hopeful of negotiating a deal to manage the facility for 20 years after its completion.
The project was unveiled by construction and energy minister Brian Wilson on Lewis last Thursday. British Energy and Amec are already working in partnership to build an offshore wind farm of 30 turbines near Skegness.