The auction house in Leyburn, North Yorkshire, started the 54-week build process this month with a ceremonial 'cutting of the sod' - which also marked 20 years on site since chairman Rodney Tennant opened their purpose-built saleroom in 1993.
The programme of works has been designed so that the sales calendar continues without disruption until the extension opens in summer next year.
Tennants say: "As well as up-to-date facilities encompassing three new salerooms and departmental areas, there will be galleries of display cases constantly promoting items for forthcoming sales and opportunities to host music, theatre, lectures and exhibitions.
"Two new enlarged restaurants will facilitate catering for all occasions."
The family firm is run by Rodney Tennant who, in 1991, commissioned a state-of-the-art auction centre at Leyburn. This comprises three auction halls, a large restaurant seating 150 people and free on-site parking for up to 600 cars.
In June last year ATG reported that he was setting up a new management structure to pass the day-to-day running of the company on to a fourth generation - his three daughters, Alison, Jane and Caroline, who were all made directors.
Tennants were established by Rodney's grandfather over 100 years ago. They also now have offices in Harrogate and Oakham, Rutland.