The fence will be moved 239 yards from the bottom of the hill, round the bend and on to the finish straight.
"That fence had a problem where horses jump it perfectly well and then knuckle over," racecourse MD Edward Gillespie told BBC Radio Gloucestershire.
"What is important is to prevent horses falling if they haven't actually made any sort of error at the fence."
The change will mean an extra fence for horses and jockeys to tackle in two and two-and-a-half mile contests such as the Queen Mother Champion Chase.
Gillespie insists that the change, like previous less drastic modifications such as changing the profile of the fence and levelling the take-off and landing areas, is being made with support from trainers and jockeys.
"The jockeys and the trainers support the idea of having one more fence, rather than having the fence in its original position," said Gillespie. "One jockey did point out to us that the sport is called jump racing which I thought was very positive!"
"I hope that it'll be 'win win' from the point of view that it will be safer for the horses and better for the spectators."
The changes will be ready in time for Cheltenham's showcase meeting in October.
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