Taiji plans to sustain its dolphin slaughter by sectioning off part of a cove to make it a place where people can swim and kayak with the animals.
The Japanese town made infamous by Oscar-winning documentary The Cove will open a marine mammal park where visitors can swim with dolphins.
But an official says the town will not end its annual slaughter.
The town of Taiji has begun researching a plan to section off part of a cove and turn it into a place where people can swim and kayak alongside small whales and dolphins, Masaki Wada said.
Wada says the project is aimed at helping sustain an annual hunt that turns waters red with blood and angers conservationists.
"We already use dolphins and small whales as a source of tourism in the cove where dolphin-hunting takes place," he said on Monday.
"In summer, swimmers can enjoy watching the mammals that are released from a partitioned-off space.
"But we plan to do it on a larger scale. This is part of Taiji's long-term plan of making the whole town a park, where you can enjoy watching marine mammals while tasting various marine products, including whale and dolphin meat."
The park will be separate from Hatakejiri Bay, the place into which the fishermen of Taiji corral dolphins, select a few dozen for sale to aquariums and marine parks, and stab the rest to death for meat.
The plan calls for the creation of a whale amusement park stretching roughly 28 hectares (69 acres) by putting up a net at the entrance to Moriura Bay in northwestern Taiji, the official said.
The 2009 film "The Cove" brought Taiji to worldwide attention, winning an Oscar the following year, after graphically showing the killing, including by using underwater cameras. Activists continue to visit the town to protest the hunt.
Taiji, in western Wakayama prefecture, is looking to open part of the park within five years, the Wada said.
Black whales and bottlenose dolphins caught in waters near the town would be released into the pool, which would be developed as a nature park that also includes beaches and mudflats, he said.
Wakayama prefecture said the town caught 1277 dolphins in 2012 and has licence to capture 2026 this season, which began in September and runs until August next year.