Parliament has approved a contract agreement with Construtora Queitoz Galvao S.A of Brazil, who will design and construct the new facility.
The first phase will see the rehabilitation and extension of the existing runway from 2438 metres to 4000 metres.
And other works will see rehabilitation of the existing taxiway, taxi-links and apron expansion and other airfield facilities enhanced and built.
Chairman of the committee on roads and transport, Michael Coffie Boampong, says the upgrade will support programmes of the Savannah Accelerated Development Authority (SADA) and serve the domestic and sahalien regions.
He added the project is scheduled to be completed over a period of 18 months after the design approval.
Boampong says the development will support domestic air travel, improve airport revenue, rectify deficiencies in aviation infrastructure, eco-tourism and cultural tourism as well as support the agricultural sector by leveraging exports of fresh produce and agro-based industries.
The government of Ghana lauded the project and say the upgrade would enable pilgrims from the Sahelian region to use the airport during pilgrimage.
The airport is in northern Ghana, two miles west of Tamale and was previously used as an airbase, but was upgraded to an international airports in 2008.