The project will give the existing theatre its "first major facelift in 30 years" and see the construction of a two-storey extension with a range of new facilities for both performance and education work.
Speaking at this morning's launch, executive director Jessica Hepburn described it as a "momentous moment" for the venue. She employed an Olympic analogy to describe the past few years as being "like a 100m hurdles race, only with 100 hurdles, some of which were 100m high."
"We're about to change the landscape of Hammersmith and the lives of thousands of people," she added.
The beginning of the building phase marks the culmination of years of planning and fundraising, including an online fundraising appeal through which the public can donate items for the building.
Speaking to Whatsonstage.com, artistic director Sean Holmes said: "The major complication is the location of the building, which is on top of a shopping centre. So as you can imagine there was a lot of negotiation to be done... There were also early hurdles getting the funding but Jessica has done an amazing job of managing a multi-stranded funding structure."
The finance for the project has come from a combination of public and private funding. The Arts Council, local authority and central government have all contributed to the project, which was first launched over six years ago.
"The upside of the length of the negotiations is that it's given us time to properly plan what the new space will comprise," added Holmes. "We've really interrogated the use of each room, what they'll deliver and especially how they'll impact the lives of young people."
New facilities will include drama, dance, film and TV recording studios, a 60-seat cinema and a new bar and café. The construction work, which is projected to last until 2014, will see performances continue in and around the venue as building is carried out, though details of this are still to be confirmed.
London Mayor Boris Johnson said: "I am delighted that we have been able to support the redevelopment of the Lyric Hammersmith, which is a wonderful theatre serving not just local people but avid theatergoers from across the capital. It is hugely important for the city as a whole and strengthens the Lyric's position at the centre of a new cultural hub for west London."
Nicholas Botterill, leader of the council of Hammersmith & Fulham, added: "The Lyric is already far more than a theatre and this major regeneration project will not only help to inspire generations of young people but also secure this wonderful institution's place at the heart of the borough's cultural community for years to come. Combined with the emerging plans to breathe new life into the rundown area around the Town Hall and other projects along King Street, this could be the start of the rebirth of Hammersmith town centre."
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