The new stand will increase the Easter Road capacity to 20,250
Hibernian say their new East Stand will make Easter Road "one of the finest football stadiums in Scotland".
The new 6,400-capacity stand, which will be completed early next season, will increase the maximum attendance at the Edinburgh ground to 20,250.
Hibs' game against St Johnstone on Saturday will be the last before the old East Terrace is demolished.
Chairman Rod Petrie described it as an important milestone for the Scottish Premier League club.
Petrie said construction of the new stand came during difficult economic times.
"The fact the club is able to build a new stand during what is a very challenging time for football, and the economy as a whole, is testament to the rock solid financial footing of the club created by returning a bottom line profit for five consecutive years," he added.
Saturday's match will be an emotional day for many supporters as we say goodbye to the old East Terrace
Hibs chairman Rod Petrie
"Today marks an exciting milestone in the club's history - the start of construction of a new East Stand, and the completion of Easter Road Stadium.
"Once the new stand is finished, Hibernian will have one of the finest football stadiums in Scotland and the largest, fully-covered UEFA-compliant football stadium outside Glasgow.
"Saturday's match against St Johnstone will be an emotional day for many supporters and all of us at the club, as we say goodbye to the old East Terrace.
"I am sure that the new East Stand will soon find a place in their hearts."
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