The Big House, as the University of Michigan venue at Ann Arbor is nicknamed, will get luxury boxes and its capacity increased by 750 to 108,251 after university chiefs gave approval to improvements.
Originally built in 1927, if the improvements go ahead, it is hoped the work will be completed in time for 2010.
Designs will be presented in six months time, with an application to go ahead with the building in a year.
The largest American football stadium in the world is about to get even bigger, after a $226m renovation scheme for Michigan Stadium has given initial approval.
