The city's council has given Niche Drinks the go ahead to establish a new cream liqueur factory and Irish Whiskey distillery at Campsie.
The firm said they aim to revive the once proud tradition of whiskey production in the Maiden city by opening the first distillery to be built there in 200 years.
Mr Mulgrew confirmed the new distillery also plans to use locally produced grain in its whiskey production process.
Currently, it is also one of the biggest outlets in the area for cream sourced from local farmers.
Niche Drinks, formerly St Brendan's Irish Cream Liqueur Co, employs up to 90 people at peak production periods.
The new venture will lead to the creation of high quality jobs in distillation for food science graduates, as well as other positions.
The company has been manufacturing and exporting cream liqueurs from their site at the old Leckpatrick Dairy on Rossdowney Road for almost 30 years.
However, Managing Director Ciaran Mulgrew said maintaining the site was becoming increasingly difficult.
We are keeping our fingers crossed for an early decision on our application for a change of use of our current site to supermarket use and we will then invest the proceeds from a sale of that site into the new facility.
"Our business has remained strong even in the current climate and we have to plan for the future.
"We want to increase our production capacity and to add new technologies into the business and that is why we are building a distillery in the new factory," he said.
"Our current town site has been in use as either a dairy or drinks manufacturing plant for over 50 years and while we continue to operate to the highest international standards, it gets harder to maintain the production facilities as each year goes by."
Niche Drinks now want planning approval that would allow them to change their existing town site to supermarket use to help fund the new project.
Mr Mulgrew said they had been supported by local politicians, suppliers and Derry City Council.
SDLP Foyle MP Mark Durkan welcomed the development.
"The owners and management deserve every congratulation on their success to date and every encouragement in their new plans.
"The solid workforce who have been delivering productivity and quality, are also to be commended for helping to bring about these developments and the prospect of more employment for the future," he said.
Environment Minister Alex Attwood welcomed the council's decision to back the new distillery.
He said: "This is a significant new development scheme which will benefit the city for many years, creating much needed employment in the area."