Diesel generator engines in Ramsey Power Station will be decommissioned this year.
Manx Utilities says it follows a third-party analysis of the high voltage electricity network supply to Ramsey and the north of the Island.
The engines and generators have not been operated in recent years and are now 50 years old.
The exhaust stacks will be dismantled in early 2019 with the diesel engines and fuel storage tanks removed after.
The site will remain operational with high voltage electrical equipment providing power distribution for the north and ensuring the availability of an alternative power generation location for the future.
Chairman, and MHK for Ramsey, Dr Alex Allinson says: "Careful consideration and risk profiling has enabled the Board to proceed with the Ramsey Power Station decommissioning programme.
"The network is resilient and reliable, enabling us to dispose of the plant which has served Ramsey well since the early 1980’s.
"This change clearly demonstrates Manx Utilities’ commitment to reduce carbon emissions as outlined in the IoM Government’s ‘Responsible Island' policy."