Announcing the plan on Wednesday night at a Queenstown Chamber of Commerce function, new airport chief executive Scott Paterson said the company was expecting recent growth to continue and the extension would provide additional capacity and improve the "airport experience" for departing passengers.
The 570sq m extension would be built on the northeastern corner of the terminal. As well as increasing the size of the domestic and international departure lounges, it would provide an opportunity to add more security screening lanes and emigration booths.
"The terminal was built to handle an annual passenger volume of 700,00 and we've been operating well above that in recent years," Mr Paterson said.
"These planned capital works are in line with our master plan and will collectively improve terminal areas suffering congestion at peak times."
Other works planned include a 170sq m extension for a new toilet block at the southwest end of the terminal, near the baggage reclaim area.
The main toilet block in the concourse would also be extended and reconfigured.
Two new oversize baggage belts would also be installed - one in international and the other in the domestic baggage reclaim - which would make handling of larger baggage, such as skis, snowboards and bikes, easier.
"The number of passengers is expected to increase based on the 2012 record passenger numbers to date and with 33 international flights scheduled this winter, up from 29 last year," Mr Paterson said.
Construction was due to begin before Easter. Some of the work would be completed by winter and most by mid-September.
Rilean Construction was awarded the contract for the departure expansion
