The jazz musician lived in the home in Queens with his wife Lucille from 1943 until his death in 1971.
The state of New York appropriated $5 million for construction of the center. Queens College, which runs the city-owned museum for City University of New York, will raise an additional $4 million, the New York Daily News reported.
An architect is being sought for the project, which is scheduled to take about 15 months. The visitors center should be completed by December 2008, Director of the Louis Armstrong House Museum and Archives Michael Cogswell said.
The museum currently uses the basement of Armstrong's house for exhibits and his garage for a gift shop, the Daily News said. Both will move to the new building, and the garage will be restored to its original condition, complete with a Lincoln Town Car, circa 1967.
Armstrong's home is a city and state landmark.