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Mt Difficulty Ltd has applied to the Central Otago District Council for land use consent to build an 80-seat restaurant and expand the existing tasting facility at Mt Difficulty, near Bannockburn.
Mt Difficulty general manager and winemaker Matt Dicey did not disclose the price of the development but said it would be a "multimillion-dollar" project.
The proposal would not be affected by the proposed purchase of Mt Difficulty by Foley Family Wines, which was still awaiting Overseas Investment Commission approval, Mr Dicey said.
"It's still business as usual ... It makes commercial sense to press on with the development."
Mt Difficulty had its first vintage in 1998 and opened a cellar door facility on its present site in 2003.
The cellar door was expanded in 2012 and Mr Dicey said by 2014 it needed expanding again.
"It's always outpaced our expectations ... an illustration of the impact of wine tourism."
The latest expansion project had been driven by "overwhelming demand" for Mt Difficulty facilities, in particular from tours, Mr Dicey said.
The development will see a new restaurant built underneath the existing tasting facility, which will be expanded. A new car park will also be built.
Mr Dicey said the total maximum occupancy of both facilities would be 100, comprising 90 customers and 10 staff.
News of the proposed expansion follows an announcement earlier this month from Gibbston Valley Winery chief executive Greg Hunt for a multimillion-dollar boutique lodge and cottages complex at Gibbston Valley Winery, near Queenstown.
It will have a central lodge, basement wine cellar, spa and 24 guest cottages.
Tourism Central Otago general manager Glenys Coughlan said the latest winery developments illustrated the growth of wine tourism.
"The accelerated growth is quite exciting for the region."