http://www.remodeling.hw.net/cost-vs-value/2014/

I could describe the process of having such a modification done for about $300. But the info is useful only if you happen to live in my area of Mexico in a brick home with iron casement windows. You really need estimates from contractors in your area. It's not possible for people here to help without at least knowing your location and how your home and window are constructed. Photos would also be helpful.

Call a few local contractors and get a few bids........You should know what kind of window that you want to replace it with or the bids could be low based on the wrong type of window.

Thinking of doing the same in my kitchen. By making the window smaller and removing a peninsula, thereby allowing the full wall for cabinets and countertop. Is this a costly renovation in northeast US? Also can I extend my current granite countertop without having to replace all of it?

Scope of work would benefit from consulting local designers.