The move will boost production of ultra-low sulphur diesel at the plant.
Work will involve building a hydrotreater unit to remove sulphur from fuel supported by a hydrogen plant.
Detailed engineering and design is underway and construction is scheduled to begin in late 2019, subject to regulatory approval.
At its peak building activity will support up to 1,000 construction jobs.
Bryan Milton, president of ExxonMobil Fuels and Lubricants Company, said: “ExxonMobil continues to invest in the Fawley refinery and chemical plant, Britain’s largest integrated facility.
“This investment will make Fawley refinery the most efficient in the United Kingdom, supporting Esso’s industry-leading logistics and fuels marketing operations.”