The update will arrive on February 6th and will be larger than the standard update -- understandably so, seeing as you'll have to reinstall the entire game. However, once the installation is complete, the developers feel confident that they will be able to better optimize updates in the future and keep the amount of hard drive space required for the ever-growing game down to a reasonable size.
According to the developers, the update will bring down the installation size for the game across the board. The Xbox One version of the game will drop from 35GB to 10GB, Xbox One X will go from 47GB to 25GB and PC will shrink from 47GB to 27GB. Once the update has finished downloading, it should install automatically so you can jump back into the game.