The 75-million-dollar investment into the company's Studholme site, is part of a strategy to grow value through its ingredients business.
Fonterra's proteins are designed for product applications such as medical and high-protein sports nutrition.
CEO Miles Hurrell says the expansion will allow the company to increase production of the high-value product and ultimately grow returns to farmers.
Site works begin next month, with the first product due to come off the line in 2026.
