Work starts this week to build a three-storey anchor store for Primark, doubling the size of its current shop to 60,000 sq ft.
Project client is Land Securities, owner of the Bridges centre.
Jonathan Buckle, portfolio manager for the Bridges, said: "We've worked hand-in-hand with Sunderland City Council to ensure we proposed a viable extension strategy and I can't wait to see our ideas take shape. What's more we'll be bringing cranes back to the skyline of Sunderland City Centre and creating much needed jobs for the local economy."
Morgan Sindall regional managing director Gordon Ray said: "We're so pleased further investment is being made in the centre of the city. The new extension will bring additional footfall to the already popular Bridges shopping centre.
"Morgan Sindall has a long track record of delivering high quality retail facilities and is able to draw on a wealth of experience in this sector. We're looking forward to building on our already strong relationship with Land Securities in the northeast."
Completion is scheduled for July 2012.