The £10 million project includes revamping the historic pump house building, which sits between the Riverside Museum and the Hydro Arena in Glasgow, creating up to 300 jobs during the construction phase, bosses said.
The former pump house, which is owned by Clydeport, will be home to the whisky museum and visitor centre while new buildings will contain a shop, cafe, whisky tasting bar and the single malt Scotch whisky distillery.
A planning application, submitted last year, has been approved by Glasgow City Council and work is now scheduled to get under way later this year, with completion scheduled for autumn 2015.
The project has been developed by a small group of industry experts, led by Tim Morrison, formerly of Morrison Bowmore Distillers and current owner of the AD Rattray Scotch Whisky Company. He said it would celebrate the role whisky has played in shaping Glasgow's heritage.
Mr Morrison said: "The city was once home to many whisky distilleries and we think the Glasgow Distillery will put Glasgow right back on the Scotch whisky map. Few people know the historical significance of the iconic pump house building to the Scotch whisky trade.
"In years gone by, this building controlled the entry bridge into the Queens Dock ensuring Customs and Excise could keep a close eye on goods in and out, including Scotch whisky."
"My great-grandfather John Morrison built the pump house in 1877 and it gives me great pleasure to now have the opportunity to bring the building back to life, restore it to its former glory and give the building and the surrounding area the respect and status it deserves."
It is expected to employ 25 people once it opens.