The Otago Settlers Museum could be completely closed for at least 18 months, with its 17 full-time employees remaining on staff.
The Dunedin City Council-owned museum's board favours effectively closing the complex until its $35 million redevelopment is completed late next year.
Museum director Linda Wigley said the board's view, expressed at a recent meeting, was "a very positive suggestion".
The board favoured the museum's "total closure" until the planned "grand reopening" next year.
Ms Wigley said this would allow museum staff to concentrate on the redevelopment project, which would double the size of the museum's public spaces.
Much of the museum was a "construction site", she said. The board resolution favouring closure is to be considered by the council community development committee, and Ms Wigley was preparing a report on the matter.
The museum had a core staff of about 17, and had taken on some extra short-term contract staff during the redevelopment, she said.
Asked if there could be any redundancies, she said it was premature to discuss this in detail. However, front-of-house staff were employed through the Dunedin Public Art Gallery. Other staff at the museum were busy with the redevelopment.
At present, the redevelopment is focused on the museum's original brick Burnside building.
However, a central section, the museum's NZR bus station booking hall and a nearby exhibition room, has remained open this year.
The room offers a brief history of Dunedin's early settlement and development, including photographs. The booking hall offers another exhibition, including video displays.
Cr Bill Acklin, who chairs the council community development committee, said that closing the museum complex for about 18 months or more was not a "fait accompli".
Some people had reacted negatively to the limited facilities, but closing the complex completely to general visitors might not be the best option, he said.
Otago Settlers Museum
Staff: About 17, plus short-term contract staff.
Cost of redevelopment: About $35 million.
Completion date: Late next year.
Services continuing, or in alternate forms: School education service; community outreach using other venues, including Dunedin Gasworks Museum; plans to revamp museum Internet site and display digital portrait photographs.