During the long shutdown of the Large Hadron Collider (LHC) in 2019-20 (LS2) the present Inner Tracking System (ITS) of the ALICE experiment based on silicon pixel, silicon drift and silicon strip detectors, will be entirely replaced by a new tracker using novel monolithic silicon pixel chips. This new tracker will significantly enhance heavy flavour measurements, which are out of reach for the present system, e.g. charmed baryons, such as the ΛC, and will allow studying hadrons containing a beauty quark. The new tracker will provide an improved pointing resolution in rϕ and z, decreasing the present values by a factor 3 and 5, respectively, to about 40 μm for a pT of 500 MeV/c. Each of the seven layers will be constructed using 50 μm, respectively 100 μm thin silicon chips on a very light weight carbon fibre based support structure for the innermost and the outer layers. The material budget for the first three layers corresponds to 0.3% X0/layer while the four outer layers will have an average material budget of 1% X0/layer. The innermost layer will be placed at 23 mm radius, compared to presently 39 mm. Furthermore, the readout rate of the new ITS will increase from presently 1 kHz to 50 kHz for Pb-Pb collisions and 400 kHz for p-p collisions, thus matching the expected event rate for Pb-Pb collisions after LS2. This contribution will provide an overview of the upgrade of the ALICE ITS and the expected performance improvement and will present the actual status of the R&D.