The new plant, Ireland's largest independent biomass power plant, will be fueled by untreated and uncontaminated clean wood and willow (virgin biomass).
Some of these supplies will be imported but some, such as willow and spruce, can be grown and supplied by local farmers.
The plant will generate enough electricity to power some 68,000 homes.
Up to 350 new construction jobs will be created when building work begins on the plant later this month, and 30 full-time jobs will be created at the station once the project is completed in 2017.
When complete, the power station will produce 42 megawatts of electricity. It will also include a fuel processing plant that will take waste heat from plant chimneys and use it to refine biomass for other commercial uses.
Commenting on the announcement of the new station yesterday, Taoiseach Enda Kenny said the investment is “a vote of confidence in the Irish economy and is part of the recovery that is beginning to spread to every region of Ireland”.
He added that the power station will contribute to reducing our greenhouse emissions.
“Ireland is committed to meeting 40% of electricity demand, 12% of its heat, and 10% of its transport, from renewable sources. The new Mayo plant will help us meet our targets”, Mr Kenny said.
Michelle Mulherin, Fine Gael TD for Mayo, also responded to the announcement, saying it was "fantastic" to receive formal confirmation yesterday from the Mayo Renewable Power that finance for their project at Asahi is finally over the line.
"This project, alongside the transatlantic fibre optic cable to be built by Christmas in which Microsoft is a substantial investor, can have a transformative effect on the North Mayo economy bringing investment and jobs.
"With these synergies the site is now ripe for cloud computing and development of a data centre. As illustrated by the recent Apple announcement of a €850 million investment in a data centre at Athenry these big ICT companies want to locate in areas where there is green energy generation such as that proposed by Mayo Power."
Read more: IFA: Air pollution study highlights need to create a sustainable biomass market