The new theatre will have surround sound and a laser projection unit - one of only a few in New Zealand - which will provide a very clear picture on the screen.
Vinnell said the new theatre would provide a "run-off" space, allowing the cinema to retain less popular films for a longer time and show more arthouse films.
"It enlarges our opportunities with smaller films."
It would also have facilities, such as the ability to plug in a laptop, which would make it suitable for hire for business meetings.
The theatre is due to open in mid-July.
In the next six months, Vinnell is planning to upgrade the concession stand area.
"We're going to change some of the food styles in there," he said.
"We want to break away from some of the sugary snacks and provide food that's a little bit more healthy."
He is unsure whether he will apply for a liquor licence in the future, believing that alcohol is not appropriate in a family-oriented venue.
Interior painting of the complex and an upgrade of the toilets is part of the makeover plan.
The building was originally a warehouse which in 1952 had an extension built on the front and became a one-screen cinema. In 1995 it was converted into a three-screen cinema and in 1997 was taken over by a company that operated multiplexes.
Vinnell has been at Embassy 3 since 2000, starting out as operations manager for the company that owned it and then buying the business in 2003.
His view is that there is still a place for cinemas despite the increase in streaming of movies.
"I still believe they are the core of the community," Vinnell said.
"We pour lots back into the community through fundraisers and donations. It would be an average of $30,000 a year."
