The new space - which its backers describe as 'iconic' - is supposed to symbolise the success of 'creative Britain'.
The building will be located to the south side of the gallery on a site close to a number of plots that have previously caused much local controversy.
The project has however won the backing of Ken Livingstone, who announced that he would pump £7 million into it through the London Development Agency.
The development will create approximately 23,000m 2of new space, with the overall size increasing by 60 per cent.
One of the main ambitions of the scheme - which apparently 'completes' the entire Tate Modern project - is to open a south entrance, a move that will connect the gallery with its southern neighbours.
This will also allow for a new 'north-south street' running through the building, which will be open for at least 12 hours a day.
The new building will not just be made up of gallery space; it will also include education and performance facilities.
The Tate, and its director Nick Serota, hope to win planning in the first half of next year and fast-track the construction so it is ready in time for the 2012 Olympics.