Winemaker and general manager Matt Dicey said the expansion to the Bannockburn winery would almost double its wine production capacity.
Despite the tough economic times being experienced in the industry, he and business shareholders were confident about its future.
"There's a been a couple of receiverships of wineries in this area and it's generally a tough time for everyone in the industry.
"The market for high-end wine is declining and there's competition from more than 100 different labels in Central Otago."
However, demand for Mt Difficulty's wines remained strong and sales had increased in the past year, despite the recession, he said.
"We've created a following which stands us in good stead for the future and we've invested heavily in marketing, with a broad-based distribution, exporting to 20 different countries."
The majority of the wines produced by Mt Difficulty were sold within New Zealand.
Pinot noir dominated Mt Difficulty's vineyard plantings, making up 85% of Central Otago grape planting.
The company has decided to balance that with more white grape varieties and its new 30ha property in the Pisa foothills near Cromwell contains pinot gris, riesling, sauvignon blanc and gewurtztraminer grapes, which will yield a first small crop next year.
"There haven't been many aromatic whites to source around here and Central Otago produces top pinot noirs, so the same conditions can produce top aromatic whites, which are well received in the market," Mr Dicey said.
The company had received grants from the Energy Efficiency and Conservation Authority - one for the an energy audit and the other to install a woodchip-fired heating system to keep the barrel room warm and heat water.
As well, the company already had a waste-water treatment plan to recycle water used in the winemaking process and planned to use it for irrigation.
It is also investigating developing a small hydro-electricity scheme to use race water.
"Having an eye on your impact on the environment is part of our responsibility as a major land user, enhancing it and looking to the future," he said.
