Changi Airport's T1 is undergoing a $500 million upgrade to be transformed into a "Tropical City".

The Civil Aviation Authority of Singapore (CAAS) and Takenaka Corporation inked a contract today to rejuvenate the 27-year-old terminal, said CAAS in a media release.

The "Tropical City" will see improved passenger flow and experience, coupled with the refurbishment of the terminal's interior design and finishes.

Work has already commenced in May, and is scheduled to be completed in the third quarter of 2011.

Key design highlights will be a new 'lantern' structure along T1's roofline and an "Orchid Library" located in the Departure Check-in Hall, which will feature blooming potted orchids hovering in a frame-like structure.

Aesthetics aside, a new departure kerbside canopy spanning the entire building façade and extending over the first two road lanes will offer arriving passengers shelter from bad weather.

A new centralised Departure Immigration will be created to improve passenger flow and the main terminal building will be extended into the airside by 35 metres, increasing the space available for new services and facilities.

The contract was signed by CAAS' Director-General & Chief Executive Officer, Mr Lim Kim Choon and Takenaka Corporation's Managing Director, Mr Atsuyoshi Suzuki.