Construction is expected to be completed by end 2018, according to Abdulla al-Hudaid, Jazeera Airways chief operating officer.
The local First United Company has won the contract for the project, which has an estimated budget of KD15m ($46m).
The planned terminal is expected to have a capacity of 1.2 million passengers annually. The scope includes the construction of a car park building and the installation of a remote check-in facility and a business-class lounge.
In July last year, Kuwaits Ministers Council approved the request for land made by Jazeera Airways.
The dedicated terminal is expected to help decongest Kuwait International airport, which has been operating beyond capacity for years.
It also aims to create better travel experience for passengers flying with Jazeera Airways.
Al-Hudaid said Jazeera Airways is preparing a study looking into potential code-sharing partnerships with international airlines.
The airline started out as a low-cost carrier but has changed its strategy in recent years. We have begun transitioning into a legacy airline we need partnerships that will allow us to operate flights both in the Far East and in Europe, Al-Hudaid said.
The Jazeera terminal will be the third major structure that will be under construction at the Kuwait International airport.