A Minister of State has signed the foreshore licence for dredging a commercial berth and manoeuvring area in Fenit Harbour.
Kerry County Council applied to the Department of the Environment for the licence.
Minister Jimmy Deenihan has welcomed the development.
Dredging in Fenit will help vessels used by Liebherr which uses the port to export its goods made in Killarney.
The container crane company is currently developing an industrial unit on the site of the former Fenit Sea Aquarium.
It followed Liebherr’s acquisition of a 99-year lease from Fenit Harbour.
Previously Kerry County Council said funding the dredging which will cost at least 300,000 euro will be a significant challenge.
Minister of State at the Department of the Environment, Paudie Coffey, has approved in principle the Foreshore Licence applied for by Kerry County Council.
The Chief State Solicitors Office will now be instructed to begin the drafting of the necessary legal papers to give effect to the decision.