Seletar Airport, which currently handles mainly private and pilot training flights, will be torn down and rebuilt to expand its operations, as part of a bigger plan to increase the efficiency of Changi Airport.
The upgrade - slated to start next year - will see the new Seletar Airport equipped to handle more traffic, thereby allowing Changi Airport to make better use of its runways.
This will ultimately boost Singapore's position as a hub for intra-Asian and global air travel.
A spokesman for the Civil Aviation Authority of Singapore (CAAS) said: "With the growing demand for air travel and increased aircraft and passenger traffic at the Singapore air hub, there is a need to optimise the air hub's capacity. Smaller and slower aircraft, including turboprop aircraft... will be moved from Changi Airport to Seletar Airport in due course."
While flights by such aircraft make up a small proportion of the total number at Changi Airport, they require disproportionately larger air space.
For safety reasons, smaller planes need a greater separation distance from other aircraft when taking off or landing, aviation experts said. This is because smaller planes are more affected than bigger planes are by air turbulence that the latter generate.
In some cases, two landing slots are needed for one turboprop aircraft, which means less runway efficiency, they added.
Firefly, which operates about 10 flights a day to Malaysia, and Berjaya Air, which operates seasonally to Malaysia, are currently the two main turboprop operators at Changi Airport. When they will move to Seletar Airport has not been confirmed.
Plans for the airport's upgrading, including its size, are being finalised, the CAAS said.
The Straits Times also understands that the exact location of the new airport terminal, which will be housed within Seletar Aerospace Park, has not been decided. At least two options are being looked at - near the existing terminal or on the other side of the runway near the airport's control tower completed in 2012.
The plans to improve the terminal - the first major upgrade in decades for the airport built before World War II as a British military air base - are part of the development of the aerospace park.
Seletar is now home to more than 100 leading global and local aerospace companies, including engine-maker Rolls-Royce, helicopter manufacturer Eurocopter, ST Aerospace and Jet Aviation.
Apart from the building of the new control tower, the runway was also recently lengthened from 1.6km to 1.84km to accommodate bigger, heavier aircraft.
In the first nine months of the year, the airport handled about 18,000 passengers. It had about 22,000 for the whole of last year.
Changi Airport had more than 40 million passengers in the same period, 0.9 per cent more than in the corresponding period last year. It handled 53.7 million passengers in the whole of last year.
ST Aerospace chief operating officer Lim Serh Ghee said: "We heard of the plans for the new passenger terminal and are certainly excited about how the impending new development at Seletar Aerospace Park will help shape aviation here."