Jet2CityBreaks will operate city breaks to Funchal on a Monday year-round starting from 1st November 2021 from Edinburgh Airport.
Package holidays will also be available for summer 2022.
Madeira is a region of Portugal, an archipelago off West coast of Africa. Funchal is its capital.
Steve Heapy, CEO of Jet2CityBreaks, said: “We are continuing to see huge demand for Winter 21/22 and Summer 22 from Edinburgh Airport, so we are adding Funchal to our Jet2CityBreaks offering to give customers and independent travel agents in the region even greater choice.
"The stunning city with its traditional Portuguese architecture, cosmopolitan dining and shopping scene and lively nightlife, means it has an endless list of attractions and experiences to keep everyone entertained.
"With a fantastic choice of flights and hotels on sale to Funchal from Edinburgh Airport for Winter 21/22 and Summer 22, we know that the addition of Funchal to our city breaks portfolio will be welcome news to holidaymakers in Scotland looking to get away.
"It also expands our Madeira programme even further, adding to our already popular programme of flights and package holidays.”
The Scottish Government has remained non-committal on any opening up of international travel, though England has announced that there will be ‘some opening up’ from May 17.
A SNP spokesman said in a statement that the position on international travel would be considered in the next Covid review, which is though to be announced next Tuesday.
The current guidelines restrict non essential travel abroad.