The three-form intake will create a total of 60 places a year for children from the ages of 13 to GCSE and A levels.
It will open to Year Nine pupils at the site of the current prep school in Greyhound Road in September 2017, before moving to a purpose-built yet-to-be revealed location in south Fulham.
It is hoped that the new school will be completed in September 2018 for Year Nine and 10 pupils to use.
The prep school currently has 652 pupils aged between four and 13.
Children who are not part of the prep school will have to undergo an assessment to attend the new senior school.
The new senior school will allow these pupils to “stay in the system” rather than having to sit stressful exams required to attend other senior schools, said Neil Brooks, headteacher of the school.
Mr Brooks will also be in charge of the senior school too.
“Children at the prep school will not have to sit stressful tests to go to our senior school," he said.
“There is now the option for children who want to stay in our system and like what we do.
“We’ve had really positive feedback from prep school parents too because it alleviates the anxiety on their children when they’re trying for independent schools in London and further afield which focus on academic performance.
“We will look at children in the round and see how the can school serve the children, and make them a successful adult that can contribute to the community .”
The school will be fee-paying but Mr Brooks say it will be a boost for the community: “This is exciting news, and it’s good because there is a demand for places.
“We will also be offering scholarships to for strong academic children who would not normally be able to afford it.”
He added: “There will invariably be employment opportunities and it will bring income to nearby businesses and shops.
“It’s a very exciting project.”
Fulham Prep School, which was founded in 1996, and will remain at Greyhound Road.
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