The investment is the final phase of the £1.3bn Manchester Airport Transformation Programme (MAN-TP), first announced in 2015.
The first phase saw Terminal 2 more than double in size, re-opening in July 2021.
This latest investment will complete the transformation of Terminal 2, with new check-in and baggage reclaim facilities, and new passenger facilitie, doubling the size of the departure lounge.
There will also be work on the airfield to cater for next generation aircraft, with a new dual taxiway system to improve airfield efficiency and flexible aircraft stands.
Enabling works are already under way.
Upon completion, expected in 2025, around 80% of all passengers will use the expanded Terminal 2, with Terminal 1 set to close.
More than 500 jobs will be created in the construction phase alone, MAG said.
Chief executive Charlie Cornish said: “Manchester Airport is a key economic asset for the North, and this investment will maximise the contribution it makes to creating a balanced and globally competitive UK economy.
“Our £1.3bn transformation programme demonstrates our long-term commitment to providing a great airport experience for passengers who travel through Manchester. I’m delighted to be announcing the go-ahead for the final phase, which will open in 2025, connecting the people and businesses of the north to dozens more global destinations, and creating jobs and stimulating increased levels of trade and tourism.”
Transport secretary Mark Harper said: “As the aviation industry recovers after covid, it’s great news to see this significant vote of confidence in the UK. This investment will be a huge boost for the north, benefitting passengers flying in and out of the region as well as supporting thousands of jobs.”
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