A 10-year strategy to transform the National History Museum at St Fagans on the outskirts of Cardiff is to be unveiled.
St Fagans currently attracts around 700,000 visitors a year
National Museum Wales officials want the site to tell the story of Wales from its earliest times, and not just from the middle ages on.
They want some funding for the project, which will cost between £6m and £8.5m, to come from the assembly government.
A National Museum Wales report shows visitor figures increased last year.
Michael Houlihan, director general of the National Museum Wales, said Oriel 1, a new gallery which opened in March, was the "first step" towards transforming St Fagans.
Museum officials consulted 5,000 organisations and individuals to help them decide the future of St Fagans, which attracts about 700,000 visitors annually.
The museum currently illustrates and interprets life in Wales from the middle ages to the present day. But under the new plans, older works will be moved to the site from the National Museum Cardiff.
Officials say they aim to fulfil the expectations of visitors who want to learn more about the roots of Wales and its diversity.
Mr Houlihan added: "Nations and peoples have a fundamental need to honour the past, their stories and individual memories. Without them, there can be no sense of identity."
Funding for the St Fagans project will be sought from commercial sponsorship, grant-awarding bodies and private individuals, as well as from the assembly government.
The project is expected to take around 10 years.
Some artefacts will be moved from Cardiff to St Fagans
The St Fagans development will be announced at the launch of National Museums Wales' annual report, which details the performance of all of Wales' seven national museums.
Culture Minister Rhodri Glyn Thomas, who will be hosting the launch of the report, said he was looking forward to seeing the developments over the next decade.
The report claims visitor figures for all seven national museums in Wales have risen above 1.5m for the first time.
This success has been attributed to the National Waterfront Museum in Swansea.
The seven national museums in Wales are: St Fagans: National History Museum; National Roman Legion Museum, Caerleon; Big Pit: National Coal Museum, Blaenafon; National Wool Museum, Dre-fach Felindre; National Slate Museum, Llanberis; The National Waterfront Museum, Swansea, and the National Museum Cardiff.