The site, located between Waikanae and Waikanae Beach, borders Waikanae Park with its croquet club and swimming pool, and is close to the Waikanae Golf Club.
Summerset chief executive Julian Cook said the new village would complement Summerset's existing Paraparaumu village, which is celebrating its 20th anniversary this month.
"Homes in our Paraparaumu village are always in high demand and I expect this village will be just as popular with people who want to experience a Summerset lifestyle."
He said the new village's site will allow for spacious landscaping, using existing trees and foliage.
Mr Cook said Summerset was looking ahead to the opening of Transmission Gully and its impact on the Kāpiti district.
"Kāpiti has seen significant development in recent years and this will only increase once Transmission Gully opens the area up to Wellingtonians from 2020.
"Forecasts show Waikanae's over 75-year old population will grow by around 22 per cent over the next decade," he said.
"This great news shows that despite increasing competition from the likes of Lower Hutt, and in recent years Wellington, Kāpiti Coast continues to be a significant lifestyle choice for retirees," Kāpiti mayor K Gurunathan said.
"The retirement industry currently contributes over $60m per year to the local economy.
"It supports the direct employment of over 1000 employees.
"If you include the multiplier effect, through well-paid services provided by a range medical services, that economic contribution to our GDP will rise.
"Retirees living in these villages are also talent banks making huge contributions to the volunteer sector.
"Council staff will be working with Summerset through the pre-application process," Mayor Gurunathan said.
The new village will include Summerset's award-winning memory care concept.
Memory care apartments offer people living with dementia a high-quality one-bedroom apartment in a secure environment.
The memory care concept was awarded the Aged Care Association's Built and Grown Environment Award for exceptional design in aged care in 2017.
Summerset will be announcing its 2018 full year financial results on Friday.
