Business owners Scott and Trudy Davies hosted an official sod-turning on Thursday to mark the beginning of the $20 million project, which is set to be completed at the end of March 2021 in time for the ginning season.

Mr Davies said the new gin would boost the production of cotton-related products from about $60 million worth to $150 million worth.

"This year ... we potentially will be ginning about 10 per cent of Australia's crop on this site," he said.

"Currently, we have approval to do up to 100,000 tonnes of raw cotton every year, which equates to, in real terms, about 800 million pairs of socks every year. Going forward, we'll have the capacity to gin up to 180,000 bales."

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The husband and wife team are very excited that the project is moving forward.

"After four and a half years of planning, going through the worst drought on record along with COVID-19, we're finally able to get the project under way," Mr Davies said.

"The Australian cotton industry is a terrific and innovative industry and we are so pleased to be able to deliver this new state-of-the-art cotton ginning facility and its benefits to our growers."

Gunnedah shire councillor Gae Swain was at the event and congratulated the Davies for their "initiative and commitment".

"This is a significant project with great flow-on benefits for our economy and community," she said.

"This expansion is another positive sign for our shire's future."

Tamworth MP Kevin Anderson said the expansion was a "classic example of an Aussie family having a crack at something they love to do".

"To see where it's come to today on the back of the great Australian dream with Scott and Trudy is truly heartwarming," he said.

Mr Anderson helped secure $9.8 million for the upgrade of Clifton Road between Carroll and Breeza this year, which will pave the way for the gin's expansion.

The 13.5km stretch of Clifton Road will be sealed, and five kilometres, from Hoggarth Street, Maitland Street and Bulunbulun Road, will be widened.

"What we've done to support Scott and Trudy and their family ... is try to fix up the crappy roads around here, namely Clifton Road. It's bone-jarring and damages vehicles when they try and get out of here," Mr Anderson said.

Work is expected to start on the Clifton Road project in January 2021 and be completed by December 2021.