Australia's Canberra Airport expects its newest terminal will be completed in time for the capital's centenary.

Work is now underway on the western concourse terminal, the latest stage of the airport's AU$420 million infrastructure project.

The terminal will include five new aerobridges, 12 check-in counters, new club lounges, retail and food outlets and more baggage handling facilities.

It will also feature an indoor taxi queuing area which has been described as an Australian first.

Another undercover carpark for 1,200 car spaces will increase car parking capacity by 50 per cent when it is completed in March next year.

Canberra Airport managing director Stephen Byron says the project is expected to be finished by mid-2013.

The new concourse will mirror the southern concourse terminal with the two terminals being joined by a spectacular glass atrium, he said.

Mr Byron says it has been a daring project, with the global financial crisis, falling passenger numbers and economic problems in the United States and Europe creating challenges.

But he says despite the obstacles, they are set on creating a unique passenger experience.

As an airport we need to look beyond things like the grounding of Tiger Airways, beyond the volcanic ash plume disrupting flights and beyond the current economic problems, he said.

We've got to build this infrastructure for the next 20 years and it's going to be a real statement of welcome to our city.

We want to try to deliver the best small airport in the world.

The airport's southern concourse terminal opened in November last year.