Parts of the Powerhouse Museum will need to be demolished to remove iconic exhibits from display and move them to storage or their new Parramatta riverside home.

The herculean scale and complexity of shifting 338,000 heritage items from Ultimo is detailed in a comprehensive report developed as part of the new museum's business case made public on Tuesday that underlines the risks of managing the largest museum move in modern memory.

Museum of Applied Arts and Sciences is the custodian of a collection of around 500,000 items, valued at more than $311.5 million, built up over 150 years and renowned throughout the state, Australia and the world.

The Powerhouse Mueusm's Locomotive No.1. Credit:Dallas Kilponen

Most of the 338,000 items based at Ultimo, including 6000 on exhibition, will need to be relocated and stored until the new museum opens in 2023, but before then all objects will need to be properly identified, conserved, digitised, packed and tracked to prevent damage, loss or theft.