Dyson made the announcement today at the company's global headquarters on the outskirts of Malmesbury, a historic market town in Wiltshire, southwest England.
The new campus will sit on 517 acres of space nearby, on former Ministry of Defence land at Hullavington. Dyson has said this will expand the company's UK footprint tenfold.
"After 25 years of UK growth, and continuing expansion globally, we are fast outgrowing our Malmesbury Campus," said James Dyson. "The 517 acre Hullavington Campus is an investment for our future, creating a global hub for our research and development endeavours."
"It will enable us to continue creating world-class products and jobs right here in the Cotswolds."
British engineering and innovation are a passion of Dyson's. After being the only prominent designer to argue in favour of Brexit last year, he committed £15 million over the next five years to tackle the UK's engineering skills gap.
He is also opening a new university, the Dyson Institute of Technology, this September on the recently expanded Dyson Campus in Malmesbury. It will feed Dyson's engineering workforce, which he hopes to double from 3,000 to 6,000 by 2020.
Dyson's announcement was welcomed by British Prime Minister Theresa May, who has made the creative industries, engineering and technology central to the country's post-Brexit growth plan.
"This investment is a vote of confidence in our modern industrial strategy and our determination to cement the UK's position as a world leader in high-tech engineering," she said. "Dyson's exporting strength and commitment to creating jobs in Britain is a real success story that demonstrates the opportunity that our plan to create a truly global Britain can present."
"It is also good to see that the site chosen by James Dyson will bring former MoD land back into productive use."
The site includes world war two hangars, which will be restored as part of the project. Site preparations for phase one of the Hullavington Campus begin next week.
The Hullavington announcement comes two weeks after Dyson opened a new Technology Centre in Singapore. The centre focuses on developing connected-home technologies.