Singapore's Changi Airport will redevelop a carpark into a mixed-use complex to expand its capacity, the airport said on Monday.

The carpark in front of Terminal 1 will be redeveloped, with construction expected to begin next year, Changi Airport Group said.

As part of the project, codenamed Project Jewel, Terminal 1 will also be expanded from a capacity of 18 million passenger movements per year to 24 million passenger movements.

Prime Minister Lee Hsien Loong revealed at the National Day Rally on Sunday evening that a new terminal will be built at the airport, and a military airport near the downtown area will be moved to Changi so that the land can be used for homes and industry.

Changi Airport Group said the new project will enable Changi Airport to capture the tourism market and boost Singapore's appeal as a stopover point for global travelers.

Envisaged as the "Gardens at the Airport", it will offer a full myriad of offerings, including a central waterfall.

The Changi Airport currently has three terminals and a cargo center.

The Budget Terminal of Changi Airport has been closed last year to make way for a new fourth terminal. The two projects will raise the capacity of the airport to 85 million passenger movements.