A rendering of an expanded Walnut Street Theatre in Philadelphia.

PHILADELPHIA—America's oldest theater—the Walnut Street Theatre—unveiled a $39-million expansion plan during its annual Gala Concert on Friday evening.

The expansion plan, which will provide more than 35,000 square feet of new space, will also include a fully renovated lobby and box office, additional space for its growing educational programs, two state-of-the-art rehearsal halls, a 400-seat theatre-in-the-round and a public restaurant.

The capital expansion project will allow for the conversion of former rehearsal halls into the first dedicated education spaces in the history of the theatre. When completed, the theatre will offer three new dedicated classrooms that will enhance the capabilities of its Theatre School.