Arsenal will add around 780 Club Level seats to the Emirates Stadium, taking the overall capacity back above 60,000.
The club announced the plan on Wednesday, with work beginning in May and due to be completed in two summers, finishing in 2019.
In a statement, Arsenal said the redevelopment would "help bring our capacity back in line with our original figure from 2006 [when the stadium opened]" and involves "adding an extra row to the front of Club Level."
Capacity has fallen just below the 60,000 mark in recent seasons "due to safety requirements and improvements to facilities for disabled supporters," the club added.
Arsenal regularly announce sellouts for home games, although several thousand seats, including a large number of the expensive club-level seats, have been empty at some recent matches.
Some season ticket holders opted to stay away last season to show their discontent with manager Arsene Wenger, and seats have continued to remain empty this time.
But Arsenal's chief Commercial Officer Vinai Venkatesham said the added seats will help meet demand and added: "As we continue to face high demand for tickets in all areas of the Emirates Stadium, this is a significant investment to ensure that as many supporters as possible are able to watch the team play."