Construction will create 200 jobs with the first 5,000 extra-seat phase ready for the start of next season, with a further 500 ready in December.
Phase two will see the balance of the seats installed in 2013 taking capacity to 30,750.
Executive Director Martin Perry said: “This is a huge win for the Albion but it is a huge win for the City as well.
“When the work is complete, over 8,000 more supporters will be able to come and support the team and it will deliver another 430 jobs, including 200 during the construction phase, and £7million into the local economy.”