Co-founder Mike Krieger made the announcement on Twitter earlier today:
We're rolling out 1080x1080 uploads (and higher-quality viewing) for IG on iOS and Android. Let me know if feed looks a bit sharper today :)
Notably, Krieger says that a lot of work has been put into image optimization to minimize the affect on bandwidth.
We did a lot of work on image optimization so network bandwidth should not be affected
You can download the Instagram 7.1 update from the App Store now.