The Nelson Tasman Hospice has released plans for a new $11.5 million building.
The hospice is moving from near central Nelson to a large site on the city outskirts.
The chief executive of the hospice, Frans Dellebeke, said the region's population was growing and demand for hospice services had increased 28 percent over the past four years.
He said the hospice, which cares for more than 155 patients at any one time, was moving because of plans to expand the nearby private hospital.
Mr Dellebeke said the hospice receives 65 percent of its operational funding from the Nelson Marlborough District Health Board.
The $1 million annual shortfall is covered by fund-raising, grants and return on investments.
Construction is expected to start next month.