Current capacity at Bloomfield Road is around 10,000
Blackpool have announced development work on the new South Stand and South West corner of their Bloomfield Road ground will begin immediately.
President Valeri Belokon has revealed he will invest in the venture in partnership with the Oyston family.
"I have no problem investing further in Blackpool Football Club," Belokon told BBC Radio Lancashire.
"This was always part of the long-term plan we talked about when I first got involved with the club."
The rebuilding plan will see 3,500 seats added to the development, with the South Stand being renamed the Jimmy Armfield Stand.
The southern part of Bloomfield Road has been derelict since the old stand behind the goal was demolished in 2003.
"There has been a change of emphasis as the club's policy has always been not to put revenue at risk by developing the stadium," said chairman Karl Oyston.
"We always tried to obtain property income first to enable us to develop.
This will be a 50-50 partnership with the Oyston family and that is as it should be to move this club forward
Blackpool president Valeri Belokon
"That has not been as easy to achieve as we first hoped. But now with the investment from Mr Belokon and my father (Owen Oyston) we can go forward with this joint venture, albeit with their money at risk, and we can now wait to get a tenant in place further down the line."
Belokon initially bought a 20% stake in Blackpool in 2006.
The Latvian businessman has since invested heavily in an attempt to improve the club's fortunes.
"I am delighted we can finally do this," said Belokon. "I am happy, the club is happy and I feel we have a good future together.
"Everyone has some kind of problem to contend with in life, but we have no problem because we have a good manager, good players and a strong board so we can go forward and look to a good future."
Karl Oyston admitted it is not the best time to be investing in a football club.
"They (Belokon and Oyston senior) are slightly at risk and in the current financial climate that may seem an odd thing to do but I feel it's admirable that they are willing to risk this to get us across the line and get on with the building of the South Stand."
Belokon added: "This will be a 50-50 partnership with the Oyston family and that is as it should be to move this club forward and shows great strength from within."
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