Fabric on end of divan in Mediterranean island (8)
I believe the answer is:
cretonne
'fabric' is the definition.
(cretonne is a kind of fabric)
'on end of divan in mediterranean island' is the wordplay.
'end of' suggests the final letters.
'in' indicates putting letters inside.
'mediterranean island' becomes 'crete' (Greek island).
The last letter of 'divan' is 'n'.
'on'+'n'='onn'
'onn' going into 'crete' is 'CRETONNE'.
(Other definitions for cretonne that I've seen before include "Heavy fabric used for slipcovers and draperies" , "Heavy fabric used for furnishing" , "Type of cotton fabric" , "Fabric used for upholstery" , "heavy material" .)