Melbourne Airport is planning a $A500 million third runway to cope with huge growth in passenger traffic.
Construction is likely to begin in 2016 and will take between two to four years to complete.
AAP reports aircraft movements expected to jump from 200,000 to 281,000 by 2022-23. Passenger numbers are forecast to reach 40 million by the 2020 and more than 60 million by 2033.
The new runway will be approximately 3km long and 60 metres wide and capable of handling aircraft up to the size of an A380.
Airport chief executive Chris Woodruff said passengers would spend less time on the ground taxiing to and from terminals, and aircraft will burn less fuel on more direct flight paths and shorter trips from the gate to the runway.
He said the third runway would be part of a $A10 billion investment over the next two decades in the growth of Melbourne airport.