Llanelli Scarlets have announced plans to move to a £20m new stadium with a 15,000 capacity by 2007.
The Scarlets are moving from Stradey Park after 100 years
The club is in partnership with Carmarthenshire Council to develop the sports venue on a new site in the town.
The complex will also include an athletics track, training academy and a second floodlit pitch.
The council will own the new ground with Stradey Park being bought back from the Welsh Rugby Union and developed for alternative uses.
The club says the move - to a location yet to be agreed - is necessary because they cannot increase capacity at Stradey, which has been their home for 100 years.
Supporters have initially welcomed the move, although some traditionalists are likely to be opposed.
Club chief executive Stuart Gallacher said: "This is a momentous day in our own great history.
"Putting the emotions aside, this is a professional sport that we are playing. We really have serious ambitions to be one of the top sides in Europe - we can no longer afford to stay in a stadium that is decaying."
The new stadium will have around 12,000 seats and a 3,000 standing area.
Gareth Jenkins, director of rugby, who played in the historic October 1972 match when the Scarlets beat the All Blacks, said: "At this moment, this facility has served us well, it has been a fantastic stadium.
"It has enabled us to be where we are today but the 100 years has taken its toll on Stradey Park, this project can set us up for the next 150 years of our future.
"I'm delighted that we have started the process, we are quite clear what our ambitions are."
Council chief executive Mark James said details were now being finalised but they were looking to open the new stadium by 2007.
He said the location of the planned stadium would help ease the gridlock the town suffers on big match days.
"We have not looked outside Llanelli, we have looked at a number of possibilities but have not finalised the site," he said.
He added that it would be an "iconic" building that would be made available to the wider community.
Club historian Les Williams, who has been visiting Stradey for 53 years, said: "It is going to be a huge wrench but we have got to go with it.
He said: "I never thought this would happen but when you look at the place now, it's inevitable, it's the only way forward."