The move will make the company the first post-production company to operate in three key global locations for commercials production. The visual effects shop already has offices in London and New York.
The office in Santa Monica will start trading in January, and will be staffed by personnel from London and New York, as well as local talent.
The Mill's co-founder and chief executive, Robin Shenfield, said: "The feedback we've had from clients on the West Coast is that there's a real appetite for a more European look. That has very much been our experience in New York, and we anticipate that to be the case on the West Coast."
In August, The Mill appointed Long Acre Partners in preparation for a potential secondary buyout or an initial public offer.
The company is looking to end its relationship with the venture capital company 3i, which has held a stake in The Mill since backing a management buyout in February 2001.
The Mill's co-founders, Shenfield, Pat Joseph and James Morris, will remain majority shareholders following any deal, which will include the company's content management and delivery business, Beam.tv.