Frederick St is emerging as the preferred end point for State Highway 88, where it meets the SH1 one-way pair.
This would shift the end of SH88 north from St Andrew St, which runs between the outpatient and inpatient buildings for the under-construction hospital.
The change looks set to be proposed by NZ Transport Agency Waka Kotahi and could enable a more pedestrian-focused St Andrew St, to be looked after by the Dunedin City Council.
Public feedback could be sought by the transport agency next month or in June, but the idea is being run past the council first.
"The NZTA SH88 project aims to ensure St Andrew St delivers the safety, accessibility and travel choices people need to move to and from and around the new Dunedin hospital area," a report for councillors said.
"The SH88 project has identified the transfer of SH88 from St Andrew St and parts of Anzac Ave to Frederick St as the emerging preferred option."
It was not stated in the report what changes might be envisaged for SH1 in the hospital area.
The transport agency and the city council would need to formally agree to switching ownership of the relevant streets to realign SH88.
"DCC will need to agree to the condition in which the road is handed over," the council said.
NZTA has described SH88 St Andrew St as the main east-west link to and from the Dunedin central business district.
It is used by about 12,000 vehicles a day.
The agency anticipated there would be large increases in the numbers of people crossing St Andrew St between the two new hospital buildings.
In previously issued background material, the agency said
they needed "to plan for improvements in this area to keep people safely moving as the city grows and changes."
