The upgrade will involve doubling the size of the station concourse, widening two platforms, adding five new lifts and eight new escalators, according to a spokesman from the Department for Transport.
The improvements are intended to reduce train delays caused by overcrowding and congestion on the platform, and provide easier connections across the south east, the spokesman said.
Works are expected to start in Spring 2020 and will take around two years to complete. They will be sequenced to ensure minimum disruption, the spokesman said.
Chris Grayling the transport secretary said: “With 46m people now using Gatwick Airport every year and 20m coming by train, it is vital that we make the station more accessible and customer friendly for those travelling through it.
“The UK’s second largest airport has direct rail links to more than 120 destinations and is an important public transport hub.
“We want to see Gatwick Airport’s success continue to flourish and ensure that it is ready for even more passengers in the future.
“Through this £150 million investment, we will deliver vital upgrades to boost the station’s capacity and provide better, seamless journeys for all.”
Stewart Wingate, the Chief Executive Officer at Gatwick Airport, said: “Gatwick has been transformed in recent years and the redesigned train station will take the airport’s redevelopment to the next level by providing a seamless transition between the airport and the station, more lifts, escalators and a doubling in the size of the concourse.
“The new station will complement the huge improvements to rail services at the airport, which include new fleets of Gatwick Express and Thameslink trains and services that now leave the airport for London every three minutes – as frequently as services on the tube.
“The project is a fantastic example of the public and private sector working together to deliver a world-class transport hub that will comfortably manage the expected growth in air passengers and also encourage people to switch to rail as part of our push to get more people to travel to the airport by public transport.”
The number of people using Gatwick Airport station each year has grown by six million since 2010, according to the spokesman, who said the station is niot currently designed for a high volume of daily passengers often carrying bulky luggage.
The renovation will be managed by Network Rail, in partnership with the Department for Transport.
Gatwick Airport Ltd and Coast to Capital Local Enterprise Partnership are co-funding the project with £37m and £10m respectively.
Paul Harwood, Director of Investment for Network Rail, said: “The transformational enhancement to Gatwick Airport station will provide passengers with a much smoother and more pleasant experience and also reduce train delays.
“Along with the recent improvements on the Brighton Main Line and our record £4.3 billion funding settlement for maintaining, operating and renewing the railway over the next five years, this investment is excellent news for passengers, businesses and the economy.”
Patrick Verwer, Chief Executive Officer of Govia Thameslink Railway, said: “This much-needed scheme will deliver real benefits for passengers thanks to enhanced platforms, new lifts and a larger concourse.
“At such a busy station these upgraded facilities will significantly contribute to the smooth running of our services for travellers getting to and from the airport.”
Jonathan Sharrock, Chief Executive at Coast to Capital said: “If our economy is to grow, we need a transport network that supports faster, more reliable, and less polluting journeys for business, leisure and freight travel.
“Gatwick airport is an international destination and its station is a gateway to London and the wider Coast to Capital area.
“This plan will greatly improve the interchange for commuters, visitors and business which will support the sustainable growth of the area with Gatwick airport at its heart.
“We are delighted to have contributed £10 million and look forward to working with partners to deliver a better experience for passengers.”