According to local newspaper the Liverpool Echo, the hotel's operator Ability Group submitted an application to Liverpool council last week and further details are expected to be announced over the coming days.
The two-storey building would extend the hotel's existing Grace Suite and would hold theatre-style events for more than 900 people and banquets for 600.
A Hilton spokesman told the Echo: "The Hilton Liverpool submitted a planning application with the Liverpool council requesting a 400sqm extension of the Grace Suite, on the hotel’s first floor.
"The proposed extension aims to create a destination restaurant and quality venue with state-of-the-art technology to accommodate banquets for 600 people and theatre style events for more than 900 people. The proposed extension will bring a combination of additional full and part time employment opportunities to the hotel and also has the potential to generate additional commerce in the city, benefiting neighbouring businesses."
The £55m hotel opened in 2009 and is located on the edge of the Liverpool One shopping complex. It has 215 bedrooms.