The company is going to boost the footprint of its park in Osaka, western Japan, by one fifth, with new attraction The Wizarding World of Harry Potter slated to open in 2014, a spokesman said Thursday.
"We will build several attractions, including a school for wizards," he said. The company later added a recreation of wizarding village Hogsmeade would be among the attractions.
James and Oliver Phelps, who played the Weasley twins in the Harry Potter movies, were greeted by dozens of Harry Potter fans dressed as characters from JK Rowling's books at the official announcement in Osaka.
The blockbuster series has been a huge success in Japan, sparking long queues of costume-clad fans at bookstores every time the Japanese translation of a new novel was released.
Cinematic releases of each instalment have also proved wildly popular.
The Harry Potter commercial juggernaut, with its seven books, eight films and huge merchandising operation, has made made author Rowling a millionaire many times over.
Brad Globe of Warner Brothers, the studio behind the movie franchise, said the Universal Studios Japan expansion was a boon for Harry buffs.
"Harry Potter continues to captivate generations of fans around the world and we are delighted to announce this partnership... that will allow us to bring the magic of The Wizarding World of Harry Potter to Asia," he said.
"We think this is the perfectly timed next step in bringing the magical world of Harry Potter to life for even more fans."
The operator of Universal Studios Japan, which opened in 2001, is a private firm licensed by the US Universal group. It has attractions featuring Sesame Street, Peter Pan's Neverland, and the Land of Oz, among others.