The site extension in Campbeltown, Scotland, will be built next to CS Wind's existing onshore wind tower site.
In return for the investment, Dong will be granted preferred access to the facility and the towers produced there.
"It will be able to produce at least 50 towers a year and 70 jobs will be safeguarded as a result," Dong said.
As a result of the investment, CS Wind will be able to provide 95 towers to Siemens for offshore projects developed by Dong Energy, including Walney Extension East and Hornsea Project One.
"Our investment means that we and other offshore wind developers will be able to source towers in the UK, which is fantastic news not just for us but the whole UK offshore industry," said Dong's UK country chairman Brent Cheshire.
"We plan on building more wind farms here, so this investment now will ultimately help us meet our targets in reliably delivering projects on time while bringing down the cost of offshore wind," Cheshire added.
In April 2016, South Korean firm CS Wind acquired Wind Towers Scotland and its Campbeltown facility. In July 2016, CS Wind UK signed memorandums of understanding with developers Vattenfall and Siemens to provide towers to UK projects, onshore and offshore.
"Thanks to our continuous effort to build an offshore facility in the UK and Dong Energy's significant contribution on investment, we are able to build this extension which will not only benefit other UK offshore wind farm developers but also secure 70 jobs in Campbeltown," said CS Wind chairman Seong-Gon Gim.