Singapore said Friday it will spend nearly SG$1.3 billion (RM3.25 billion) to build an additional airport terminal and other facilities to bolster its status as an international aviation hub.

Operator Changi Airport Group said SG$600 million (RM1.5 billion) will be spent to erect a fourth terminal building -- called T4 -- on the former site of a budget airline terminal which has been closed to make way for the project.

A further SG$680 million (RM1.7 billion) is earmarked for additional aircraft parking stands and other support infrastructure in the entire Changi airport complex.

The new terminal, designed to serve both full-service and budget airlines, will have a capacity of 16 million passengers a year, raising Changi Airport's annual capacity to 82 million passengers, it added.

Construction will start this year and the terminal is expected to be ready by 2017.

"These infrastructure investments will ensure that Changi Airport is well positioned to remain a major global aviation hub, ready to meet the challenges of growing passenger and aircraft traffic in the years ahead," the airport operator said in a statement.

Changi enjoyed its busiest year in 2012, handling a record 51.2 million passengers, up 10 percent over 2011, despite economic woes in Europe, whose airlines use the city-state to connect to Australia and other Asia-Pacific destinations.

The airport's previous record of 46.5 million passengers was recorded in 2011.