The plant, expected to come online in 2021, will add to current nickel, cobalt sulphide and copper production at the bioheap-leaching operation.
Terrafame has already done ground preparation work and construction will begin soon.
Financing has already been arranged, with Terrafame minority shareholder Trafigura putting in €42 million and the Galena Fund and 77%-owner Finnish Minerals Group contributing €30 million each.
Finnish Minerals Group CEO Matti Hietanen said it would be a big step for Finland's hopes for a battery minerals cluster.
"This is a very important investment for Terrafame and its owners. as well as the whole Finnish and European electric vehicle battery (EVB) manufacturing value chain," he said.
"Terrafame's investment also improves the conditions for attracting more operators in the battery manufacturing value chain to Finland."
A significant share of Terrafame's nickel and cobalt sulphate production is already being allocated to manufacturing EVB chemicals, although the further processing into chemicals is currently done outside of Terrafame.
The planned plant does not yet have environmental approval from the Finnish government.
It will produce an estimated 170,000t of nickel sulphate and 7,400t cobalt sulphate per annum, as well as 115,000tpa ammonium sulphate as a by-product.
Terrafame has already entered into major technology agreements with key equipment suppliers.