Construction will begin this year, with the project expected to start up in 2022.
The Aspen project, located about 45 kilometres northeast of Fort McMurray, Alta., is expected to produce about 75,000 barrels of bitumen per day.
It will use new oilsands recovery technology designed to lower the intensity of greenhouse gas emissions and water use.
Imperial says the technology is estimated to reduce the intensity and water use by up to 25 per cent, compared with traditional steam-assisted technology.
“We do not take investment decisions lightly, particularly in these challenging times,” Rich Kruger, Imperial chairman, president and chief executive, said in a statement.
“This is the right technology at the right time to make a competitive investment. We have made the decision to proceed now because we believe this advanced technology will further the evolution of Imperial’s oilsands business.”
Imperial noted the project has the potential for the further development of up to another 75,000 barrels per day of production, depending on a number of factors, including project performance and overall business and market conditions.
The Aspen project is expected to create about 700 jobs during peak construction and more than 200 jobs during operations.