Fraport's supervisory board has decided to build a third terminal at Frankfurt airport, despite local objections over the environmental impact.
Opponents argue the extra capacity at Europe's third largest airport is not needed and that the airport just outside Germany's financial capital already creates too much noise.
The decision to press on with a project that could cost up to EUR€3 billion (USD$3.2 billion) followed a study commissioned by the Hesse state government to look at the airport's future capacity requirements, Fraport said.
"We have thoroughly assessed and scrutinised all possible alternatives before deciding in favour of Terminal 3," said Fraport's chief executive Stefan Schulte.
"We are very well aware of our responsibility to our shareholders, our customers, passengers and employees, as well as to the people living in the region."
Fraport has previously cited reports showing that passenger numbers at Frankfurt could reach 68-73 million a year from 2021. The airport last year served 59.6 million passengers, a 2.6 percent increase on the previous year.
Fraport says the airport in its current form has a maximum capacity of about 64 million passengers a year and it needs to start building a new terminal now to meet future demand.
Previous plans for the new terminal foresaw a construction in stages, with the first phase due to provide capacity for an extra 14 million passengers a year.
In total, Fraport had previously said the terminal could serve an extra 25 million passengers a year.
The city of Frankfurt, which owns 20 percent of Fraport, had last year approved the building application for the new terminal.
Fraport said construction of the new terminal will start at the end of this year and it expects to start using the terminal in 2022.