Reach level 69 with a free update to be released around the same time as the Borderlands GotY Edition.

When details of the latest Borderlands DLC, Claptrap's New Robot Revolution, were announced, there was no mention of a level cap increase. Fortunately, one is coming -- and even better, it will be coming free of charge to all owners of Borderlands on Xbox 360, PlayStation 3, and PC.

When he wasn't busy discussing the return of Duke Nukem, Gearbox co-founder and CEO Randy Pitchford spent some time at PAX revealing that, around the release of the Borderlands Game of the Year edition (scheduled for October 12), Gearbox will update the game to increase the level cap by eight, bringing it to 69. They decided on an increase of 8 because they didn't want it to be too low, or as high as the 11-level increase that the General Knoxx brought.

Joystiq reports that Pitchford explained that Gearbox opted to make the increase a free update instead of including it in the Claptrap DLC because then "you'd have to buy every previous DLC." Also included in the free update will be a rebalancing of the original game to cater to the new level cap. Given that these are the sort of things you might expect to see in a premium DLC release, it's nice to see Gearbox instead release them to fans for free.

Source: http://www.1up.com/news/borderlands-free-level-cap-increase