News of the plan, which could see up to £15 million ploughed into a new facility, comes as figures show Croydon University Hospital has plummeted from being in the top five to the bottom five across London, in a key national target for dealing with the patients in greatest need.
It also comes after the emergence of results from a damning staff survey, with 30 per cent of its own doctors, nurses and health staff saying they are so appalled by standards of care they would not want a relative or friend to be treated there.
In an exclusive interview with the Advertiser, John Goulston, who was this week made the hospital's permanent chief executive, said the current A&E is operating above capacity.
Announcing the plan to tackle the issue, he said: "We have an old-fashioned department which is not sized for the current volume of care that it has in terms of blue lights arriving as they are, and secondly in terms of volume of patients.
"We need more space for the sickest patients. We have got small areas. In our resuscitation area, which is mostly acutely ill patients, there are only a small number of bays.
"Our 'majors' [highest need patients] area, again we don't have as many cubicles as we should for the size we have.
"So we are just in the process of putting together a business case, broadly in the region of £10 million to £15 million, to put to NHS London in the next few weeks for a new A&E department."
Mr Goulston told how the hospital's A&E struggled to deal with one incident in recent weeks when about 20 ambulances turned up in one hour.
Arrivals are up ten per cent with admissions up by the same amount on last year. "There has to be capacity in the department. That level of surge has never happened before and that is what we need to tackle," said Mr Goulston.
Croydon University Hospital's A&E was built for seeing 70,000 patients a year, but is currently attempting to treat at least 100,000. A brand new department would aim to double capacity to at least 140,000, with new machinery and a state-of-the-art layout.
Kathryn Channing, the department's head of service, said options on the table ranged from building an extension to the current A&E, to stripping it out entirely, to building a brand new facility and knocking the current A&E down, replacing it with a car park. Building work could begin as early as November.
Ms Channing said: "We don't have the space to see the patients. That's the biggest challenge we face, lack of space.
"A new department is top of my wish list. It would solve a lot of problems. There is great potential here. We have a great population and to be able to have a new, state-of-the-art building would be brilliant. We need a building that is open plan."
The current internal structure means patients are often lined up on beds along corridors and in public spaces.
Last week, the Advertiser revealed that a £2.53 million IT system is set to go live in A&E as well as other departments in a bid to save time and make tracking patients through their care easier.
Mr Goulston was controversially made the permanent chief executive this week, despite receiving a vote of no confidence from non-executive members of the hospital's board. However, Mr Goulston denied a vote of no confidence was passed in him.
He added: "You can see that our board has not worked as well as it should have. We have a governance review. It will be out in a couple of weeks. You'll see the findings, conclusions and recommendations from that. Let's wait until two weeks' time."
Speaking of landing the post, he said: "I'm delighted to be appointed. I think there's a great opportunity here for the Croydon healthcare system to play its part in improving the health and wellbeing of the population of Croydon.
"To date we have not been able to play as proactive role as we should do and I think we need to make sure Croydon Health Services is a key player."