The board of Airports of Thailand Plc (AoT) approved on Wednesday a plan to expand Don Mueang to handle more planes and passengers and allow for more vehicles to park at the airport.
It also slashed landing fees during off-peak periods at Don Meuang and Suvarnabhumi to entice airlines to use both airports.
AoT president Nitinai Sirismatthakarn said the third phase of Don Mueang will cost around 27 billion baht, all or most of it to come from the agency's own funds as it has sufficient cash flow.
The expansion project includes an extended runway, office buildings, more parking zones for aircraft and long-term parking areas with the construction expected to be completed in 2025, he added.
After completion, Don Mueang will increase its capacity to serve 40 million passengers a year from 30 million at present.
Parking space will be able to handle 10,000 vehicles from 3,000 today.
Don Mueang's refurbished Terminal 2 was officially opened for domestic flights on March 8.
Mr Nitinai said the board agreed to measures to discount landing fees at certain times by 95% for regular flights and 50% for charter flights for Don Mueang and Suvarnabhumi from April 1 this year to March 31, 2018. Airlines using Don Mueang after midnight to 4.59am and Suvarnabhumi from 2am to 6.59am during the period will receive lower fees, he added.