Provincial government-owned Ontario Power Generation (OPG) will start preliminary work for the Pickering station this year and the project is expected to be completed by the mid-2030s, Ontario said in a statement.
By 2050 - the year Canada aims to achieve net-zero emissions - Ontario's electricity demand could more than double as use of electric vehicles and other clean technologies rises, according to the province's Independent Electricity System Operator.
The refurbishment at the station, located about 45 km (28 miles) east of Toronto, would create some 11,000 jobs during construction and about 6,400 jobs after completion. The project needs approval from the federal nuclear safety commission.
The plant came on line in 1971 and has not been expanded since 1986.
Ontario, with 15.8 million people, is the most populous of the 10 provinces. That number could grow by 5 million people over the next decade, according to the government.
"With new investments and jobs coming to Ontario and the population growing rapidly, our province needs clean and affordable energy," Ontario's Finance Minister Peter Bethlenfalvy said in a statement.
After refurbishment, the Pickering plant is expected to produce a total of 2,000 megawatts of electricity, enough to power 2 million homes, according to Ontario's energy ministry.
Nuclear energy is touted to be a key part of Canada's plan to achieve emissions targets and the country is also investing in new nuclear technology called small modular reactors (SMR) that are seen as efficient, quicker to build, and a way to shift away from fossil fuels.
Environmental think-tank Clean Energy Canada said the decision was a prudent step though other non-emitting sources of should also be considered for future projects.
"While nuclear will be part of the energy mix for a net-zero future, it's not a silver bullet," vice president of policy and strategy Rachel Doran said in a statement, adding that costs of renewable sources of power like wind and solar were expected to decline by 40% over the next decade.
