The new resort-style hotel will include 206 rooms and facilities to host large conferences and events.
The new property will also be made available for exclusive hire.
Simon Jones, national sales manager at Butlins Events, said: "The locale and sheer capacity of our Minehead resort lends itself perfectly to a host of corporate meetings, large events and teambuilding days.
"The development of a new hotel onsite is just another addition to our extensive corporate offering."Waitrose, Hasbro, Activision and MG are among the brands that held events at Butlins resorts in 2013.