It's the first time the company has said how much the upgrade and expansion will cost. He also confirmed a hybrid minivan will be built in Windsor.
Marchionne made the statements while addressing media at the North American International Auto Show in Detroit.
Marchionne said Windsor is "a natural choice" to continue to build the Chrysler Town and Country minivan, one of the company's flagship vehicles, and perhaps an SUV or crossover.
"It will be the best minivan you can possibly imagine; the most technology advanced; the best minivan you've ever seen in your life," Marchionne said of the next generation, scheduled to be in production later this year.
The CEO also all but confirmed the Windsor plant will also build a crossover SUV of some type.
He said "favourable economics in terms of demand" will ultimately determine when and if a crossover is built at Windsor.
On its Facebook page, Chrysler said last month the retooling in Windsor is linked to the production of "a future vehicle."
"And sorry, we can’t yet tell you what’ll [sic] be," the post reads, in part.
Marchionne said regulatory changes in terms of fuel efficiency and emissions mean the current minivan platform can't last much longer, so changes are coming.
Marchionne said the new production in Windsor is an example of the massive introduction of hybrid technology "in one of our cars" and that it marks the beginning of the long process to try and deal with this issue of carbon emissions and environment issues.
The automaker has assembly plants in Windsor and Brampton, where it assembles minivans at Windsor Assembly Plant and the Chrysler 300, Dodge Charger and Dodge Challenger at its Bramalea plant.
No government money
Last year, Chrysler asked for government assistance in retooling its Windsor facility. The request and discussion eventually turned political in the lead up to the provincial election.
Former Progressive Conservative Leader Tim Hudak called Chrysler's request "a ransom."
Marchionne called the issue "a political football" and withdrew the company's request for financial assistance.
Monday, Marchionne said "Chrysler was unfairly treated" during the negotiations and election campaign.
Ontario has since elected a Liberal majority government. Marchionne said he's met with Premier Kathleen Wynne and Prime Minister Stephen Harper since the Ontario election.
He said the company maintains "a civil relationship between investors, taxpayers and government" in Canada.
"The relationship has remained cordial," he said. "The situation has improved."