The investment is the final phase of the £1.3bn Manchester Airport Transformation Programme (MAN-TP), first announced in 2015 with a 10-year plan to "revolutionise the customer experience" at the Northern hub.
The latest instalment will fund new facilities, technology and equipment, as well as a new range of shops, bars, restaurants and airport lounges.
The first phase saw Terminal 2 more than double in size, with the new facility, the airport said, having received positive feedback from passengers and airlines since opening in July 2021.
The second phase will complete the transformation of Terminal 2, delivering improvements across the passenger journey as well as upgrading its airfield to cater for next generation aircraft.
Upon completion in 2025, around 80% of all passengers will use the expanded Terminal 2.
More than 500 jobs will be created in the construction phase, while analysis shows around 16,400 extra jobs will be generated by 2040 as a result of the economic activity stimulated by the expansion of the airport and its route network.
Charlie Cornish, chief executive of Manchester Airports Group (MAG), said: "Manchester airport is a key economic asset for the North, and this investment will maximise the contribution it makes to creating a balanced and globally competitive UK economy.
"Our £1.3bn transformation programme demonstrates our long-term commitment to providing a great airport experience for passengers who travel through Manchester."
The second phase of the project includes doubling the size of the existing departure lounge, the construction of an additional security hall, a new pier, a new dual taxiway system and more than doubling the terminal’s hold baggage capacity to more than 5,000 bags per hour.
