Tallinn Airport announced plans to build a new five-berth terminal for discount airlines this summer.
Tallinn Airport board member Erik Sakkov did not disclose the precise cost of the project but said it will be "remarkably economical."
Sakkov said the passenger flow in the airport is rapidly growing. The facility is becoming too cramped, he said, so the airport has decided to expand.
Last year, the number of passengers in the Lennart Meri Tallinn Airport increased by 38 percent - to 1.9 million. Sakkov said he expects the number to grow by another 20 percent this year, to 2.3 million.
The airport's current facilities could not serve more than 2.5 million passengers per year, the board member said.
Currently, the discount airlines operating at Tallinn Airport are Ryanair, Easyjet and Norwegian.