Frankfurt Airport's owner and operator Fraport will soon begin construction of Terminal 3 in the southern part of the airport this year.
The decision was taken following Frankfurt Airport's passenger growth forecast results from two independent research institutes that said passenger traffic to the airport was expected to rise between 68 million and 73 million by the year 2021.
Frankfurt airport is currently capable of handling 64 million passengers annually.
The Hesse state government had recently commissioned an audit that confirmed the findings of the two studies.
The government audit also explored possible alternatives in the airport's northern part for increasing terminal capacity. However, the results showed that building a new terminal in the southern part of the airport was a more viable option.
The alternatives to the terminal included the expansion of FRA's capacity by a northern extension of Pier A-Plus and a newly-built, extended Pier C.
The audit, however, proved that these options would require more investment without creating the necessary capacity expansion or providing additional docking positions for large aircraft types.
Additionally, the proposed alternatives do not have the zoning decisions and legal permission by responsible aviation authorities.
Fraport executive board chairman, Dr Stefan Schulte said: "We have thoroughly assessed and scrutinised all possible alternatives before deciding in favour of Terminal 3. Frankfurt Airport is Germany's largest place of employment and serves as the 'Gateway to the World' for the state of Hesse and Germany as a whole. The new Terminal 3 will underscore this role and thus further strengthen our region."
The airport authority will soon float an EU-wide notice and tender invitation for the first phase of the excavation works on the site of the future Terminal 3.
The airport expects to start the excavation work by the end of the year and carry on the construction for the next seven years.
Fraport CFO, Dr Matthias Zieschang said: "With an investment volume of between €2.5bn and €3bn, Terminal 3 will be one of Germany's largest infrastructure projects. Refraining from using a single general contractor for the entire terminal construction, Fraport will instead award targeted multiple contracts to various companies performing specific tasks related to the project.
"This method already proved successful with the new Pier A-Plus at Terminal 1 that was inaugurated in 2012 on schedule and on budget. In addition, this method allows regional companies to offer their expertise and thus to benefit from the construction of the new terminal."
The terminal is expected to become operational by 2022.
Image: An exterior view of the proposed Terminal 3 at Frankfurt Airport. Photol: courtesy of Fraport.