Sand is the only materials that self compacts by just adding water. Back in the 90's I ran a water truck and "jetting" the sand was one of my regular jobs. They would fill a trench with sand and then I would put a two inch pipe into the sand and fill it with water until the sand settled. You can see it happen when you have enough water in there, it just liquefies the sand and removes all voids. You absolutely have to use a lot of water when using sand as fill. The negatives of using sand is that its weight bearing load is a lot less then just about anything else. It also holds water longer then the surrounding soil, so if you get a lot of rain, the water will seek the path of least resistance and go into the sand, instead of flow over the top of compacted soil away from your building.
You didn't mention putting in a drain, so I'm thinking that's not part of the plan. I wouldn't want any more moisture next to a building then I had to deal with. I would use clean clay as my first choice and compact it as I built it up. If clay isn't available, whatever you have that will shed water once it's compacted.