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The Great Island Power Plant had previously been earmarked as an incinerator, but this proposal was turned down by planners.
The natural gas project is set to span three years, with an additional €45m investment to pipe natural into the county.
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Around 400 much-needed construction jobs are to be created during the upgrade works.
This natural-gas fired combined-cycle gas turbine, which will produce 430 mega watts of power, is to be complete and in operation by 2012.
When the new plant is constructed the existing power plant will be decommissioned and demolished.
It is expected the planning process will commence within the next month.
Plans are due to be lodged with An Bord Pleanala.
The planning process could take up to a year, followed by two years of construction - should the development get the go-ahead.
(PR/JM)
