The Menai Science Park hopes to attract new hi-tech companies to the area, especially in the energy field.
The science park was secured as part of last year's Welsh government budget negotiations, with the pledge of £10m capital funding over two years.
The 20-hectare site at Gaerwen is currently owned by Anglesey council, which welcomed the announcement.
"This is positive news and the proposed facility could represent a major new project for the island," said Aled Morris Jones, who is responsible for economic development in the council cabinet.
"Our aim is to ensure that the Menai Science Park complements the Welsh government's aim of establishing the island as a centre for excellence for low carbon energy."
The whole science park project is being led by Bangor University, which hopes its own expertise in research and development will both encourage new businesses to start up at the park, as well as offering assistance to established small and medium companies.
The preferred site at Gaerwen was one of three being considered, including two empty business parks - one in Bangor and another on Anglesey.
Ieuan Wyn Jones was appointed as the science park's director earlier in the summer, sparking a by-election on the island where he had been its assembly member.
He insisted that a "rigorous internal process" had been undertaken to identify the best site for the new park.
"I am delighted that we now have a preferred site for our science park project, which will play a key role in creating high-value employment in north west Wales," he said.
"The park will build on the existing strengths of Bangor University in a number of research areas, including energy, environmental services, clean technology, engineering and electronics.
"All the evidence shows that these areas have great potential for growth and produce jobs with much higher salary levels than the current average for Wales."
A decision to locate the park on Anglesey also ties in with the island's own strategy to brand itself as 'Energy Island', drawing on the development of wind and wave power around the area, and the bid to build a new nuclear power station at Wylfa.
Anglesey has also been designated an energy enterprise zone by the Welsh government.
"As the park develops I believe that it will benefit the whole of north Wales," added Mr Wyn Jones.
Detailed assessments of the site will now be carried out, before a final decision on building the park at Gaerwen is made later in the year.