Barcelona FC’s board of directors has rejected the option of building a new stadium and instead has approved a £495m (US$821, €602.2m) redevelopment of its iconic Nou Camp stadium.

The proposal would see the capacity of Europe’s biggest stadium increase from 98,000 to 105,000 with work starting in 2017 to be completed in early 2021.

Also planned for the remodelled stadium, which originally opened in 1957, is a new roof, which would be added to the current open structure, new restaurants with a view of the pitch and a steeper bottom tier to improve visibility for spectators.

“It was a difficult decision,” said Barcelona president Sandro Rosell. “The two projects were very attractive but we were committed to put to a referendum a project that was viable from a technical, urban-planning and economic perspective.

“To maintain our status as leaders we have to take this historic step which will require effort from everyone involved but which will guarantee the comforts that come with a new installation with the latest technologies at the service of its users and athletes.”