In a world-first for dairy plants, the Pahiatua dryer incorporates a base isolation design to protect the building in the event of an earthquake.
In an active seismic region, the design protects the plant even in a one-in-500-year earthquake.
Fonterra Pahiatua operations manager Bill Boakes said the 50 new jobs created by the expansion would provide opportunities for applicants from a range of backgrounds with different skills and experience.
"We're excited we have been able to open these employment prospects to the community we work in.
"We offer full training and development programmes and have an excellent health and safety record."
Mr Boakes also said the expansion was a major boost for the local economy, with hundreds employed during the construction process.
Fonterra managing director global operations Robert Spurway said the expansion would help the co-operative manage rising milk volumes and respond to a growing global demand for dairy.
"Milk production is up 4.3 per cent on last year," he said.
"This new plant will help us process the extra milk in a way that delivers the most value to our farmers and will also help us meet the growing global demand for dairy nutrition."
The storage capacity at the plant will increase from 9000 tonnes to 25,000 tonnes and milk powder from the new dryer is expected to be ready for export by September next year.
Co-operative director and Tararua dairy farmer John Monaghan has said Fonterra is the engine which drives the local economy with the district's 288 dairy farmers producing more than 30 million kilograms of milk solids every year.