The new development will cost £4 million, £1 million of which has already been raised, while the governors of the care firm will seek to appoint a redevelopment appeal manager to help find the rest of the funds.
Having helped thousands of terminally ill patients for 18 years, the hospice is to be improved, with the new building boasting en suite bedrooms, family spaces and day and outpatient consulting areas.
Jurat Mike Tanguy, chairman of governors, told the news provider: "We have been able to start work using the money already generously given by islanders."
Also included in the new development will be a chapel and landscaped gardens, the broadcaster stated.
This comes after a construction project was planned just outside of Edinburgh by Sir David Murray to build a green village entitled the Garden District.
Written by Andrew Miles