The proposed new home for the library is the Memorial St building which housed the Pulse Fitness Gym until the end of last year.
Spread over three floors, the new building has 1100sq m, compared with the 700sq m the current library occupies.
The new facility will include a dedicated children's library and a lending library, along with room for archives and community workshop space.
The space occupied by the current library, on the bottom floor of the main council building, is intended to be converted into offices for council staff, now spread over five leased locations.
"After a number of workshops and a lengthy process starting last year, we are now ready to present the public with a solid proposal which is going to increase staff efficiency and at the same time create a greater library space for our growing community," Queenstown Mayor Clive Geddes said.
The council pays close to $190,000 in annual rent for the five locations, where the leases are due to expire between August and December this year.
Mr Geddes said the combined lease and operations costs for the new location would be about the same amount as the council saved in rent for the five locations.
He said AMI, which owned the new building, had agreed to pay for the cost of the proposed new library fit-out, but there would still be furnishing costs to the council of about $50,000.
Converting the existing library into offices is expected to cost $350,000.
"These are very early estimates, and we will be looking at reducing the cost of the conversion. I am hoping for a much lower actual cost than what we have provided for in the annual plan," Mr Geddes said.
If the council adopts the draft annual plan at the next council meeting, which will be held in Wanaka on Tuesday, the plan will be open for submissions from April 17.
The plans for the library proposal will be on display at the Queenstown Library and on the council website.
Mr Geddes said the new library could already be operating this year if the community accepted the proposal.
