Demolition of the 160-year-old building was completed last month.
Arran-Elderslie Mayor Steve Hammell says it was tough to see the historic structure taken down but believes the new development will breathe new life into the village.
Hammell says the new development will have an exterior similar to the original inn and aims to attract people who want to move away from large urban centres.
Work on the new condominium-retail building is expected to take at least to two years to complete.