Dating from the early 1850s, the collection is considered one of Aotearoa's most prestigious and significant collections of regional and national taonga and artefacts.
It includes a significant collection of taonga, which Ngāti Kahungunu Iwi has expressed a desire to see made more accessible to whānau, hapū, the wider Hawke's Bay community and visitors to the region.
Napier City Council and Hastings District Council will share guardianship of the new facility and have both committed $3.325m each to the project.
An additional $5.47m of external funding was also sourced from New Zealand Lotteries Commission in June.
Napier mayor Kirsten Wise said the project was about more than just storage for the collection.
"This project will create opportunities for our community to have improved access to the collection, to visit it and see it in a way that ensures the collection is cared for and preserved for our future generations."
Hastings mayor Sandra Hazlehurst was also excited to have the collection – which includes many taonga from Heretaunga – in its new home in Hastings.
"These taonga are precious to our region, as well as being nationally significant, and to have them in a secure home where researchers, education groups, archivists and other visitors can access them easily is a huge step forward.
"Having the design phase underway is great progress, and we look forward to seeing more detail as it becomes available."
Work on the new site is scheduled to begin mid-2022, and the facility is set to be opened by mid-2023.