Porsche is investing 300 million euros ($495.23 million) in doubling the size of its main factory in Zuffenhausen, a suburb of the southern German city of Stuttgart.
The expansion includes a new engine works, a high-tech training centre and offices. Construction will be completed by 2016, said the company.
The news follows an announcement by Porsche chief Matthias Muller in 2013 that the sports car maker will spend a half a billion euros on remodelling Zuffenhausen and boosting the nearby Weissach Porsche Engineering development centre.
Porsche recently opened a new factory in the eastern city of Leipzig, where production of the Macan SUV, the smaller sibling of the Cayenne, is now underway.
About 8200 people work at Zuffenhausen, 3000 more than four years ago. Some 200 Porsche models a day are produced at the site.
Porsche currently employs a total of 18,882 people and plans to increase the workforce to around 20,000.