The development, which includes the creation of two new wet docks, will allow Pendennis to undertake more work – including contracts involving larger vessels.
The expansion is also an important early milestone in the masterplan to redevelop the port of Falmouth, which is seeking to create an additional 1,900 jobs by 2030.
Pendennis already employs 350 staff and operates a nationally recognised apprenticeship training programme. The business has a turnover of £28 million and is worth about £13 million a year to Falmouth's economy.
Sales and marketing director Toby Allies said: "This is the most significant development that we will have entered into in our history – a quarter of a century is a nice time to be upping our game.
"It's a very big step for the company. We have enjoyed a very good reputation worldwide and this is all part of continuing that."
Investment levels in the project will be decided by the Pendennis board in the near future, with construction work phased so that it does not disrupt the company's workload.
Earlier this year, Pendennis won approval from Cornwall Council to increase the height of its dry dock by 9m and to build two seaward-facing halls that will allow it to work on larger vessels.
Pendennis' traditional business was focused on 30-50m yachts but since its acquisition of Plymouth-based Devonport Yachts in 2010, it has been expanding into yachts of between 60m and 80m, where demand has remained strong despite the double-dip recession.
This has created an upturn in work levels that has left the company needing additional space and facilities so that it can work on several yachts at the same time.
"Without it (the expansion) we would have been turning away opportunities which would have been a shame for us and for Falmouth," added Mr Allies. The Pendennis facility, based at Palma de Mallorca, has enjoyed a busy year since its official launch in July 2011. The facility provides a convenient centre for yachts based in the Mediterranean and has already carried out eight refits.
Truro and Falmouth MP Sarah Newton said: "Pendennis is a well-respected business in the South West and internationally, with a highly-skilled workforce and a world class product. Their investment in training and facilities has been a valuable asset to the local community for the past 25 years.
"Expansion of this nature is a fantastic step forward, not only for Pendennis but also in supporting and strengthening the local economy."
Falmouth Mayor Geoffrey Evans said: "I feel Pendennis is one of the up-and-coming companies in Cornwall that is known worldwide, which has provided many apprentices with skills over the last 25 years.
"It has 59 apprentices in its company today training for high-skilled jobs, who then stay with the company instead of having to leave Cornwall. It will also secure the 330 adult jobs at present for several years to come."
