The firm, which already produces Clan Fraser whisky, claimed the venture could boost tourism and create new jobs by tapping into the existing skilled workforce. Its directors said they wanted to uphold the "rich industrial tradition" of the region, which has been a centre for textile production.
John Fordyce, who is also the project leader, said: "The historical context was one major factor in us identifying Hawick, but so was access to natural resources and raw materials. "There is a plentiful supply of pure water which the mills have depended on for cashmere and tweed production. "It's one of the reasons behind Hawick's reputation for quality manufacturing. "We also have on our doorstep what is undoubtedly Scotland's most fertile barley-producing land."
Funding for the project has come from private investors including the Duke of Buccleuch and Edinburgh-based investment company Badenoch & Co. Its owner, Malcolm Offord, will become chairman of The Three Stills Company. He said "We have a blue-chip group of investors, all of whom have an interest in or direct link to the Scottish Borders - I look forward to helping the management team deliver another boost to Scottish manufacturing and export".
The firm is the latest in a series of companies to express an interest in establishing a distillery in the region. It was hoped the scheme could create 50 full-time jobs with more than seven million bottles a year produced at the site.
And earlier this year a competition was launched by R&B Distillers to allow the public to select the location for a new distillery which would be the first in the Borders since 1837.
A former industrial site in Hawick has been acquired for the distillery development.