An additional 277 square metres of floor space added to the existing Haugh Lane store is expected to create five new full-time jobs.
The development was given planning permission last August and involves demolishing vacant garages to make way for a side extension, a meeting room and additional car parking.
The expansion comes as officials at rival discounter, Lidl, confirmed that Hexham was an area of interest to the brand earlier this year.
The work at Aldi will add 48 new parking spaces to the existing 78, as well as storage for 20 cycles.
Documents linked to the planning application suggest staff numbers will be boosted from 26 to 31 as a result.
Aldi was first given the go-ahead to open a food store in Hexham in 1999.
Back then the site was home to the North of England Wool Board warehouse before it relocated to Carlisle.
Plans for the store were passed on appeal by the then Environment Secretary John Prescott and the store eventually opened its doors in 2002.
It originally expanded its floor space by 30 per cent in 2007 with a 190 square metre extension.
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