The current manufacturing space, commissioned in 2014, was reaching its limit.
Ward said the company was seeing strong interest in its products.
Aroa has a 30-strong direct sales team in the US, alongside its commercial partner TELA Bio, which has 40.
The company's current facility is at Kingsford Smith Place in Mangere, consisting of 550 square metres of "cleanroom" space - areas designed to maintain extremely low levels of particulates, such as dust, airborne organisms.
The expansion project will add an additional 670 square metres of cleanroom space at its Richard Pearse Drive premises, also in Mangere.
The project also involves developing those premises to accommodate all the company's downstream manufacturing operations across all product lines, including fabricating finished devices and packaging in line with US FDA and relevant medical standards.
Introducing this new cleanroom space and moving all downstream operations to Aroa's Richard Pearse Drive premises would free up capacity for expanded tissue processing and freeze-drying operations at its existing facility, Ward said.
The additional manufacturing space will also allow the company to eventually double the size of its manufacturing staff.
Construction is expected to be completed and the space by the end of 2021, ready for the first quarter of the 2022 calendar year.
The company said its product revenue (unaudited) grew by 110 per cent in the first half over the previous comparative period to$17.2m.
Aroa's 2022 guidance for product revenue has been lifted to$34-37m from a previous guidance of $30-33m.
The company's ASX listed shares last traded at A$1.14, giving it a market capitalisation of A$393m.
In July, Aroa successfully raised A$47m through a share placement.
Aroa said manufacturing and development activities have not been materially affected by extended lockdowns in New Zealand to date.
The company said Covid-19 driven global supply chain disruptions were not anticipated to materially impact product manufacturing in the second half of its 2022 financial year.