Melbourne Airport is planning a $500 million third runway which will challenge Sydney to the title of Australia's gateway.
The new runway will mean thousands more jets will head for curfew-free Melbourne Airport with aircraft movements expected to jump from 200,000 to 281,000 by 2022-23.
Construction is likely to begin in 2016 and will take between two to four years to complete.
Melbourne Airport chief executive Chris Woodruff said the new east-west runway would provide additional capacity for the forecast growth in aircraft movements at Melbourne Airport by the end of the decade.
Passenger numbers are forecast to reach 40 million by the 2020 and more than 60 million by 2033.
The new runway will be approximately 3000 metres long and 60 metres wide and capable of handling aircraft up to the size of an A380.
Mr 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.
"However, there will be some areas within the existing noise contours that will experience more aircraft flying overhead as a result of the construction of a new runway," Mr Woodruff said.
"We will be working closely with various stakeholders...on measures to minimise the noise impact on our neighbours, while ensuring we continue to operate the airport in the most efficient way possible."
Mr Woodruff said the third runway would be part of a $10 billion investment over the next two decades in the growth of Melbourne Airport as the aviation gateway to Victoria and southeastern Australia.
"Airports are critical pieces of our national infrastructure, and our draft Master Plan will set out the future vision for Melbourne Airport as a 24-hour gateway for the movement of people and goods to destinations and markets around the world," he said.