TOTAL says it has found an estimated one trillion cubic feet of gas 40 kilometres west of Shetland.
The energy giant said on Monday that the find on the Glendronach prospect, which would feed into the Shetland Gas Plant, was a "major discovery".
It added that preliminary tests confirmed "good reservoir quality, permeability and well production deliverability".
Total would use infrastructure from the nearby Edradour field, which connects to Shetland by pipeline.
Scottish deputy first minister John Swinney said while visiting Shetland on Monday that it was a "very good piece of news" for the isles.
"It's an opportunity for there to be further employment and economic development for these communities. It’s a really welcome announcement today and we look forward with interest to the development of the sector as it takes its course."
Shetland MSP Tavish Scott said the "important gas field find can secure the future of the Shetland Gas Plant for many years to come".
President of exploration and production Arnaud Breuillac said: "Glendronach is a significant discovery for Total which gives us access to additional gas resources in one of our core areas and validates our exploration strategy.
"Located on an emerging play of the prolific West of Shetland area, the discovery can be commercialised quickly and at low cost by leveraging the existing Laggan-Tormore infrastructure."
Glendronach is operated by Total E&P UK with a 60 per cent interest alongside partners Ineos E&P UK Limited (20 per cent) and SSE E&P UK Limited (20 per cent).
MSP Scott added: "The offshore work will be important too for Lerwick Port Authority and the Shetland supply industry. All in all this is very positive news for Shetland’s oil and gas industry."
Oil and Gas Authority chief executive Andy Samuel commented: "This discovery is clearly great news not just for Total and the Shetland Gas Plant, but as a gas discovery it’s great news for the UK’s security of supply.
"We know West of Shetland has significant exploration potential; some one trillion cubic feet of gas, which is why we’re supporting industry’s West of Shetland Area Plan to progress exploration and development in the region.
"We’ll soon be releasing our revised Yet-to-Find estimates for the prospective resources across the UKCS and these will highlight that the Atlantic Margin ranks highly in terms of hydrocarbon volume potential.
"We want to see more activity in the region and we recently made some of these areas available in the current 31st Offshore Licensing Round, which will close on 7th November 2018, and intend to make more acreage in the West of Shetland available for next year’s 32nd Offshore Licensing Round."
Located on an emerging play of the prolific West of Shetland area, this major #gas discovery can be commercialized quickly and at low cost by leveraging the existing Laggan-Tormore infrastructure.— Total (@Total) September 24, 2018
Watch comments by Arnaud Breuillac, President Exploration & Production @Total: pic.twitter.com/UD3voIDUiS