The Royal Scottish National Orchestra is to be housed in a new wing of the Glasgow Royal Concert Hall, but a paper to be presented to the city's council this week finds the cost of constructing the HQ will now rise to more than £17m.
The Scottish Government is to step in to help fund the new rise with a £1.5m increase on the £7m it has already pledged, with Glasgow City Council to met the £1.724m funding gap.
The orchestra, which is planning to move into the new base in 2014, will have a 50-year lease.
The new building will have a rehearsal or performance space with a capacity of about 600 seats, education facilities, practice rooms, and management and administration offices.
The orchestra, now under the baton of music director Peter Oundjian, is currently based in the Henry Wood Hall in the west end of Glasgow.
However, the hall is cramped and dilapidated.
The orchestra hopes the size of the new facility will enable the public to engage with it on a much greater scale.
The new facility will be connected to the east of the Glasgow Royal Concert Hall, on Killermont Street, facing the city's Buchanan Street Bus Station.
Glasgow City Council's lead architect Kerr Robertson and his team have managed the design but it will now have to be reworked to cater for higher than expected estimated costs.
The report to the executive committee of the council, which is to meet on Thursday, says: "Tenders for the project were received on November 6, 2012 and all were significantly over budget.
"On further analysis, it was identified that the new build element of the works was largely on budget, and the higher-than-expected tender returns related predominantly to the technical complexity and risk arising from significant structural intervention and alterations to the existing building to accommodate the new spaces."
It adds: "Significant savings can be generated by a small decrease in the footprint of the extension which, importantly, reduces the risks around structural intervention with the existing facility, avoids the need to construct a large new service lift and allows the council to incorporate a percentage of the refurbishment budget from Phase 2 to improve kitchen facilities to support new proposals for front of house catering provision."
The report recommends the council's committee approve the terms of the lease with RSNO and approve the revised maximum budget of £17.224m.