The financing of the plan was approved at the club's annual assembly, with work due to begin on the stadium at the start of next year.
The proposed changes do not include an expansion to the stadium's capacity of just over 81,000.
Madrid have announced record revenue of €750.9 million for 2017-18 and president Florentino Perez believes the completed project will bring in an extra €150 million per year.
Perez said the loan would amount to up to €575 million, over a maximum period of 35 years, without “any impact on sporting activity”.
— Real Madrid C.F. (@realmadrid) September 23, 2018
“It will be more modern, more secure,” Perez said. “There are two objectives: to improve the comfort and accessibility for our fans and secondly, to obtain more income.”
Perez said Madrid want “to be the first club in the world to exceed the one billion euro revenue mark”, an aim shared by his Barcelona counterpart Josep Maria Bartomeu, who has also embarked on a redesign of the Camp Nou.
“There is a window of opportunity,” Perez added. “I think we should take advantage of it.”