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It will include a 3G indoor pitch, a new fitness suite, a café, flexible studio, changing rooms, new access, parking and outdoor spaces.
Pupils at Cefn Hengoed joined project leaders this week and the school's headteacher Carl Bale spoke of the excitement that surrounds the development.
Mr Bale said: "We are delighted to be part of this joint venture to update our current school and leisure centre facilities.
"This development will benefit not just the pupils of Cefn Hengoed, but the whole community. These are exciting times for the eastside of Swansea."
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It is being funded by Swansea Council and the Welsh Government, with a £750,000 grant from the Premier League, The FA and Government's Football Foundation with support from the Swansea City Foundation. Further contributions were made by Sport Wales, plus Freedom Leisure which manages the leisure centre on behalf of the council.
Swansea Council Leader Rob Stewart said: "I'm very proud to be here and to see work commence on what will be a fantastic development not just for the eastside of Swansea but the wider region.
"This will be state-of-the-art, a facility like no other in Swansea, and one that will be benefit thousands of people across the age range.
"Swansea Council is committed to providing our residents with the very best sports and leisure facilities we can and I'm extremely grateful to all the partners involved for sharing our ambition and for their support.
"Commencing work on this project means we have achieved yet another of the policy commitments made by the council in June to support our communities."
Other improvements will be made and the new layout will extend the opening hours of the leisure centre.
South Wales-based contractor Morganstone successfully tendered to deliver the project meaning the investment creates and protects local jobs during construction, which is expected to be completed by autumn 2023.
