The Katharine House Response Centre has been set up in Adderbury.
The hospice is now providing staffing and facilities for the NHS and will help care for people who have been diagnosed with the virus.
It now has 26 inpatient beds. It usually provides 10 for local people with life-limiting conditions.
Katherine House decided to expand to help 'cope with the expected urgent need for more community beds', as the national Covid-19 crisis is expected to peak soon.
Chief Executive, Angharad Orchard, said: "The coronavirus pandemic is an unparalleled health emergency which requires an unprecedented response.
"As a local provider of specialist care, Katharine House Hospice is well-placed to quickly support the NHS by providing staffing and our facilities during this crisis.
"We are proud that the Katharine House Response Centre will provide much-needed support to our NHS colleagues and care for people in our community who have been so supportive of our hospice for so many years."
The hospice has been working with the NHS and funding commissioners to draw up plans and re-purpose its building near Banbury to accommodate the additional beds and equipment required.
Ms Orchard also reassured the community that the hospice would continue to support its current patients, and that local people diagnosed with a life-limiting illness over the coming weeks would still be able to access Katharine House's services.
She added: "A major consideration for us was how we can care for as many people as possible over the coming weeks and continue to provide as many of our existing services as possible whilst also looking after those diagnosed with coronavirus.
"During this crisis we have adapted our ways of working to ensure our services are still there for patients and families when they need us.
"Our teams will continue to ensure a high level of joined up care and support for all our patients."
Katharine House says it will continue to review its approach in collaboration with local health services, 'to ensure that its staff and facilities are used in the most effective way possible during these difficult times, to respond to the needs of people in our community who are facing a life-limiting illness.'
To support Katharine House Hospice, donations can be made at www.khh.org.uk/donate.