AbitibiBowater is investing C$8.2m in its Thunder Bay sawmill in Ontario, Canada.
The expansion project, designed to increase capacity, will include adding another dry kiln and debarker, and a new deplaner.
Development work is expected to be completed in 2013.
The project will provide about 50 jobs at the plant, 100 direct jobs in woodlands operations and 150 indirect jobs in the community.
AbitibiBowater said the mill would increase annual production from 265 million board feet of stud dimension lumber to 300 million board feet annually.