The original garden, created to teach students about the medicinal properties of plants and to provide pharmacists with fresh materials, was the second botanic garden to be established in Britain and the forerunner to the Royal Botanic Garden Edinburgh.
The garden will be designed by landscape architect practice J&L Gibbons, which is also currently working on the landscape restoration of Marble Hill Park in Richmond for English Heritage and the new Museum of London at West Smithfield.
The Palace's Forecourt will also be opened up to the public. Both projects are part of Future Programme, a £10-million investment by Royal Collection Trust, a charity and department of the Royal Household which manages the public opening of the official residences of The Queen.
The new physic garden will have raised flowerbeds laid out in a geometric pattern, reflecting the design of early botanic gardens. The year-round planting will include both indigenous and exotic medicinal plants that would have been grown in the 17th century, such as Birthwort (said to assist with childbirth), Feverfew (thought to reduce fever), and Scurvy Grass (a remedy used by sailors after long voyages).
Alongside the re-imagined physic garden the trust is planning to create a flowering meadow evoking the 15th-century monastic garden of Holyrood Abbey, the Palace's first recorded garden.
A view of the palace gardens drawn in 1835. Image: Royal Collection Trust
J&L Gibbons is working with lead designers Burd Haward Architects on the project, with specialist planting advice supplied by Catherine FitzGerald of Mark Lutyens Associates. Research by Royal Botanic Garden Edinburgh and Royal Collection Trust informed the design process.
Work is expected to begin this winter, subject to planning permission, with the garden due to open in the spring of 2019. The Palace Forecourt will open to the public at the end of 2018.
Jonathan Marsden, Director, Royal Collection Trust, said: "The return of scientific gardening to the place of its birth in Scotland will provide a new focus of interest for visitors to the Palace, for the local community, and especially, we hope, for young people.
"It will be a further addition to the Palace's spectacular setting within the natural landscape of Holyrood Park and Arthur's Seat beyond. It forms an important part of our plans to make more of the Palace's surroundings and will provide a family-friendly space just moments from the Royal Mile.'
The original physic garden was established at the Palace of Holyroodhouse in 1670 by two of the founding members of the Royal College of Physicians of Edinburgh, Sir Robert Sibbald and Dr Andrew Balfour. Initially Sibbald and Balfour rented a small plot of land north of the Palace Forecourt, planting it with around 90 medicinal plant species.
Five years later, when space ran out, the garden was moved to Trinity Hospital, now Platform 11 at Waverley Station, and then to Leith. In 1820 the garden was established in Inverleith, where today the Royal Botanic Garden Edinburgh covers over 28 hectares and displays more than 13,000 plant species.