Dorset-based Greendale Construction Company has begun a 50-week project which will modernise the production site.
The scheme involves demolishing and rebuilding the main packaging hall, including building a new bottling plant, as well as building a new extension to the tank farm, alterations to the warehouse and a new weather canopy to the loading area.
Work is being carried out while more than 200 team members and tenants carry on business as usual around the site.
The new brewery premises and bottling plant are adjacent to the original buildings in Blandford St Mary, which have been part of the town for 115 years.
Hall & Woodhouse is the biggest employer in the town and one of the largest private companies in the South West.
Greendale project manager Scott Sykes said: “The project has got off to a positive start and we are already well established.
“As the demolition and construction phases will be carried out in a ‘live’ environment, the sequencing and co-ordination will be a key factor to the success of the project.
“The Hall & Woodhouse Company has been a major part of the Blandford community with a historical heritage spanning hundreds of years.
“We are all proud to be involved in the project and being part of Hall & Woodhouse’s future for many more years to come.”
David French, beer company director, said: “We are delighted to be working with another local company on this exciting development of our brewing, packaging and warehouse operation which will give Hall & Woodhouse a best-in-class supply chain.”