The Queen's Club will increase its capacity by more than 2,000 seats for the 2017 Aegon Championships.
It means the London club's Centre Court will hold almost 9,000 people for the June tournament which marks the start of the grass-court season.
Queen's has also signed a deal with the Lawn Tennis Association to host the championships until 2026.
Tournament director Stephen Farrow said the traditional Wimbledon warm-up event would be "better than ever" in 2017.
"Last year we sold out within 24 hours and enjoyed a 20% increase in hospitality sales, so the demand for an increase in capacity is clear," he added.
Britain's two-time Wimbledon and Olympic champion Andy Murray is the holder and record five-time winner.
Next year's tournament runs from 19 to 25 June.