The announcement came as owners The Glenmorangie Company stated they would be investing millions of pounds to fund the project.
Subject to planning approval, the distillery aims to start work this year, with the project set to be completed in 2019, allowing Ardbeg to satisfy the growing demand from its fan base around the world by increasing the distilling capacity on the site.
Revived in 1997 by The Glenmorangie Company, which bought and reopened the then closed Islay distillery, Ardbeg has seen its popularity surge as more and more people seek out its powerfully peated whisky.
Since its reopening, Ardbeg has recorded year-on-year growth, which the team say is due in no small part to its loyal following and the Ardbeg Committee.
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Designed to regenerate a site at the heart of the Distillery, once occupied by warehouses, this traditional-style building will house a total of four of Ardbeg’s copper stills - two wash stills and two spirit stills - doubling the amount the distillery currently has.
The area in which the stills currently reside will be repurposed to accommodate further washbacks.
Planning permission for a new boiler house has already been granted, moving the facility a little further away from the Distillery, and work has started.
Throughout the project, the Distillery would continue its normal operations and welcome visiting fans as usual.
In the coming weeks, Ardbeg will be inviting the island’s residents to a meeting, to allow them to hear details of the distillery’s plans at first hand.
The Glenmorangie Company, which owns both the Ardbeg and Glenmorangie distilleries, were keen to stress that the Islay whisky will continue to be "carefully crafted in the same way as it has been for more than 200 years".
Marc Hoellinger, president and CEO of The Glenmorangie Company, said: “We are delighted by Ardbeg’s success since 1997 – and by the growing passion for our whisky from fans around the world.
"Ardbeg has been distilled on Islay since 1815 and, with a new still house, we will pave the way for future generations of smoky malt whisky lovers to discover The Ultimate Islay Malt.”