Tasmania's Museum of Old and New Art (MONA) has unveiled the plans for its much-anticipated hotel, and it's got a new working name because the previous one had "offended a few people".

The planned five-star hotel is now known as 'Motown', rather than its previous title of 'HoMo', with MONA founder David Walsh explaining what was meant to be "celebratory" was being misinterpreted — and that "matters to me".

"'Motown' is tentative," the museum, which also runs the annual Dark Mofo winter festival, said in a statement on its website.

MONA has been a drawcard for tourists. ( Supplied: MONA )

"Originally it was going to be HoMo (Hotel MONA); after consultation with the MONA staff force, and with the community beyond, we decided to ditch it," Mr Walsh said.

"It turned out that I didn't really have the right to call something HoMo when I'm not gay, and it offended a few people because I guess I was being culturally insensitive.

"The people that didn't like it, really didn't like it, and that matters to me."

He said the HoMo name was meant to be "celebratory".

"We hoped the name would keep the homophobes at bay … [but] it was decided that it wasn't [our] joke to make."

The development application has been officially submitted to Glenorchy Council.

MONA's hotel development has a new working title of 'Motown'. ( Supplied: MONA )

There are plans for a playground. ( Supplied: MONA )

David Walsh says he wants to "do to libraries what I did to museums". ( ABC News: David Hudspeth )

'Nerd fest of bibliophilic paraphernalia'

The centrepiece will be a library spread over three levels featuring Mr Walsh's, "large and growing nerd fest of bibliophilic paraphernalia courtesy of total lightweights like Einstein, Newton, Darwin and Dickens".

Mr Walsh said he saw libraries as very important spaces and wanted to, "do to libraries what I did to museums".

"We're calling it a library, but I don't think it's a library.

"I want to build something that's a lot more performative, a lot more entertaining, a lot more of a creative space."

It's unclear how the $400-million development will be funded. ( Supplied: MONA )

He said his success could be equated to good fortune and libraries, which is part of why he wanted to build one.

"I knew random things that proved to be useful because there was a library in Glenorchy where I was raised and I spent a lot of time there."

"It didn't so much change my life, as give me the capacity to change my life."

MONA plans to include a convention centre in the new development. ( Supplied: MONA )

The hotel will have 172 rooms and will include a theatre, spa centre, outdoor concert stage as well as conference and auditorium facilities.

Access to the hotel will be mainly via the water on Venice-style ferries.

MONA said it did not know exactly when the hotel would open, but that it was hoping for 2024.

It is also not clear yet how the $400-million development will be funded. A community consultation session will be held on December 17th.