In this thesis I present and discuss the work carried out during my PhD in the astrophysics group of the Cavendish Laboratory. The majority of this work has been to develop the Free-space Optical multi-apertUre combineR for IntERferometry (FOURIER), a novel, high sensitivity, near-infrared beam combiner intended to be the first generation science beam combiner for the Magdalena Ridge Observatory Interferometer (MROI). FOURIER is a three telescope, J, H and K band image plane beam combiner. I first highlight the scientific motivation for a faint limiting magnitude beam combiner and the design requirements this placed on FOURIER. This is followed by a discussion of how the optical design was derived from these requirements. The simulated performance of the instrument is then discussed including the alignment and manufacturing error budget, limiting magnitude estimation, spectral resolution and modelling of thermal effects on cooling the instrument to its liquid nitrogen operating temperature. The cryogenic optomechanics are described as well as a series of laboratory tests of the fringe contrast, spectral resolution and throughput to verify the instruments performance. In addition to the development of FOURIER I discuss a numerical simulation of an optical interferometer subject to atmospheric seeing, used to quantify previously unaccounted for image plane crosstalk effects arising due to various combinations of atmospheric seeing, long propagation distances and finite sized optics present in long baseline optical interferometers.