The new £25m (€29m) facility will house a larger security area, along with an airline business centre and new retail areas, including the gateway’s first walk-through store.
Built on the space currently occupied by the airport’s coach park, the extension will also bring the terminal closer to a new tram stop.
Edinburgh Airport’s chief executive, Gordon Dewar, said the extension will transform customers’ experience of the gateway.
“This investment is the first of a number of developments that will build Edinburgh Airport’s profile around the world, helping us to compete more energetically with other UK airports and those in mainland Europe,” he said.
The airport’s board has committed to investing £150m in the gateway over the next five years.
Work on the extension, the plan’s first major project, will begin in October 2013.
The new security areas are expected to operate from late 2014, followed by the retail space in 2015.
“This is an excellent example of an exciting new development planned from beginning to end in Edinburgh, which has taken months – and not years – to plan and implement,” said Dewar.
“No bureaucracy – just a clear focus on what our customers want.”