LUTONAirport officially unveils the first stage of its £170m 10-year development programme on Thursday.
A £40m terminal, to be opened by the Queen, has been built opposite the existing airport facility.
The three-storey terminal has 60 check-in desks, almost double that of the old terminal, a larger arrivals area and improved catering. It also has state-of-the-art flight information boards and baggage handling technology.
It is linked to the existing terminal by a walkway. The old facility is to become a departures area and provide arrivals facilities.
Out-going chief executive Frank Pullman, who leaves Luton in the spring, said the 5m-capacity terminal will allow Luton to meet future demand. It experienced its busiest ever summer this year with 1m passengers in July and August.
Last year, Luton handled 4.1m passengers in a terminal designed for around 2.5m passengers.
Growth has come from low-cost airlines EasyJet and the now-defunct Debonair, and also from charter carrier Monarch. The most popular routes are to Edinburgh, Dublin and Nice.
Future growth is predicted to see Luton handling 8.5m passengers by 2007.
To meet this estimate, the airport has plans to expand its facilities to be able to handle 10m customers within eight years.
The second stage of development will see an extension to the new terminal, which will replace all functions of the old one, and additional stands for aircraft. A third stage will involve another terminal and a transport interchange around a new railway station linking the airport to London.
The £23m London Airport Parkway station is due to open by the end of the month.