The Tivoli Theater plans to expand into the adjacent Fowler Furniture Building.
The two historic buildings together in the 700 block of Broad Street will be known as the Tivoli Performing Arts Center.
Nick Wilkinson, Tivoli Foundation executive director, said a connection will be opened from the Tivoli lobby to the ornate, four-story furniture building that dates to 1889.
He said the new section will provide additional restrooms. Currently the men's restroom for the Tivoli Theater is down some steep steps from the lobby.
Mr. Wilkinson said the foundation will be occupying new offices, and he said the facility may include a restaurant.
Since the foundation took over the operation of the Tivoli and Soldiers and Sailors Memorial Auditorium, the number of shows is up 900 percent. Many of the leading performers and productions now regularly visit Chattanooga.
The Tivoli held a gala on Friday night featuring Alison Krauss as part of the fundraising for the expansion.