The Australian government has approved a $400 million new domestic terminal for Melbourne airport, which is due to open in mid-2015.
AAP reports it will be capable of handling up to 10 million passengers a year.
The $A400 million first stage of the airport's long-term southern precinct project is due to open in mid-2015.
Federal Transport Minister Anthony Albanese said on Tuesday the terminal would help the airport deal with an expected doubling of its annual number of passengers to 64 million by 2033.