Construction will be completed in two stages during the summers of 2018 and 2019.
The work will bring the Emirates Stadium back to its original capacity of just over 60,600.
The capacity has been reduced in recent seasons due to safety requirements and improvements to facilities for disabled supporters.
The extra seats will be installed at the front of the Club Level hospitality area.
The Club Level will also be upgraded and refurbished over the next two years.
Arsenal’s Chief Commercial Officer Vinai Venkatesham said: “The development of Club Level is crucial to ensuring fan experience at games is at its best whilst also enabling us to stay at the forefront of stadium hospitality.
“As we continue to face high demand for tickets in all areas of Emirates Stadium, this is a significant investment to ensure that as many supporters as possible are able to watch the team play at Emirates Stadium.”