The project will expand the airport’s terminal as well creating a new taxiway for aircrafts that will allow the runway to handle more takeoffs and landings.
Construction will take place over the course of the next 12 months and it is hoped that once completed the airport will be able to attract new airlines and more destinations.
Clive Condie, executive chairman, London Luton Airport, said: "This marks the start of an exciting new journey for London Luton, as we begin the process of transforming the Airport to deliver a great experience for our customers, Luton and the surrounding regions.
"Our vision is for a vastly improved Airport which plays a major role in providing more capacity in the London system".
The recently airport signed a 10-year deal with easyJet, which will double the number of passengers using the airline to more than 9m a year.