Aberdeen International Airport is planning to invest $20m to increase the size of its existing terminal by 50%, since it was first opened in 1977.
The redevelopment plan will include the construction of a two-storey extension to the south of the existing terminal building.
The upper level of the two-storey building will have two new passenger lounges built.
At the ground level, there will be a larger baggage reclaim area available and a security search area.
It will also include the expansion of the existing immigration and catering facilities as well as new shops.
Estimated to be completed over the next three years, the first phase of the expansion work at the airport will begin in May this year.
The project will create job opportunities for more than 100 people at the construction site.
Aberdeen International Airport managing director Carol Benzie said: "Not only does this investment represent the most significant upgrade to the airport since the current terminal first opened in 1977, it demonstrates our commitment to providing passengers with high quality facilities."
The airport has already selected Balfour Beatty as the primary contractor for the expansion.
Scotland First Minister Nicola Sturgeon said: "By increasing capacity and improving the passenger experience, the airport is making a clear statement of intent and the North East and Scotland will see the benefit.
"Aberdeen is a fantastic city with lots to offer and the airport is a crucial gateway to the North East.
"This expansion opens up the city to even more tourists and businesses, which will result in an economic boost for the city and the country as a whole."