Barca members, who collectively own the club, will be given a chance at the beginning of April to vote on the proposal that would increase the capacity of Europe's biggest stadium from 98,000 to 105,000 and help increase matchday income, president Sandro Rosell told a news conference on Monday.
The project, which also includes the construction of a new indoor basketball arena and various other installations, is expected to cost around 600 million euros (£495 million) and work would begin in 2017 and be completed by early 2021.
Barca plan to take out bank loans worth 200 million euros and expect 150 million from selling naming rights. The rest of the cost would be covered by existing funds.
Matches would still be played while the work, which would see a striking new roof added to the current structure, was carried out.
"It was a difficult decision," Rosell said. "The two projects were very attractive but we were committed to put to a referendum a project that was viable from a technical, urban-planning and economic perspective.
"The Nou Camp is part of our collective memory, the biggest stadium in Europe and an icon of the city of Barcelona.
"The option of building a new stadium on a new site has been rejected as the final cost could have saddled the club and its members with debt and tied the hands of future boards of directors," added Rosell.
The plans for the remodelled stadium, which opened in 1957, include building a steeper bottom tier to improve visibility for spectators.
There would be new restaurants with a view of the pitch and so-called "super boxes" and other VIP services.
"To maintain our status as leaders we have to take this historic step which will require effort from everyone involved but which will guarantee the comforts that come with a new installation with the latest technologies at the service of its users and athletes," Rosell said.
"What's more we will increase the value of our real estate and the capacity to generate additional income without having to sell off assets."
- Sandro Rosell