The HANARO cold-neutron research facility project was launched on July 1, 2003. A state of the art SANS instrument was selected as a top-priority instrument by an instrument selection committee, which consisted of domestic users and HANARO personnel. An instrument development team and an international and domestic instrument advisory team were formulated. At the end position of the CG1B guide, 40M SANS will be installed in the cold-neutron guide hall. The guide and the instrument simulation were performed using Vitess software and the optimum conceptual design was completed based on the simulation results and the international advisory team reviews. The 100×100 cm² area detector will be installed and the sample-to-detector distance will vary from 1 to 20 m. The refractive focusing optics and the transmission polarizer/spin flipper setup is planned for installation. The Q range of the 40M SANS instrument will cover from 0.0008 to 1.0 Å⁻¹ when considering the refractive focusing optics. In this paper, the simulation results and the design of the new 40M SANS instrument are presented.